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 language | English |
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Pages (from-to) | 306-317 |
Number of pages | 12 |
Journal | International Journal of Production Economics |
Volume | 136 |
Issue number | 2 |
DOIs | |
Publication status | Published - Apr 2012 |
Keywords
- Cyclic production system
- Inventory cost
- Safety stocks
- Service-level
- Setup cost