Optimizing service-level and relevant cost for a stochastic multi-item cyclic production system

Herbert Jodlbauer, Sonja Straßer

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

A multi-item make-to-order production system in a stochastic environment is analyzed. Assuming a common cycle production approach, the impact of safety stock, cycle time, demand, processing time and setup time on service-level and total relevant cost (holding, setup and backorder cost) is determined. To illustrate this relationship a trajectory for the service-level with respect to the relevant cost (holding and setup) is presented. Furthermore algorithms to calculate the cycle time which leads to maximum service-level at constant safety stock and to calculate the pair cycle time and safety stock which minimize total relevant cost are introduced.

Original languageEnglish
Pages (from-to)306-317
Number of pages12
JournalInternational Journal of Production Economics
Volume136
Issue number2
DOIs
Publication statusPublished - Apr 2012

Keywords

  • Cyclic production system
  • Inventory cost
  • Safety stocks
  • Service-level
  • Setup cost

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