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THE EFFECT OF FIXED PRODUCTION SETUP COST ON INVENTORY OPTIMISATION UNDER PROCESS FLEXIBILITY

Year 2018, Volume: 36 Issue: 1, 117 - 139, 30.03.2018
https://doi.org/10.17065/huniibf.411134

Abstract

Process
flexibility in manufacturing aims to produce different products at the same
production facility with the minimum setup cost. It is not possible to
completely eliminate the setup cost in most cases even if a high degree of
investment is made for process flexibility. In this study, a decision support
model accounting for fixed setup cost has been presented to make inventory
decisions in production systems that have process flexibility. Additionally,
under process flexibility, the effect of fixed setup cost on inventory
decisions has been investigated. In this context, process flexibility problem
with fixed setup cost has been modelled using Mixed Integer Linear Programming
approach. Numerical assessments have been done on three different production
systems (dedicated, two chain and flexible) by means of the proposed decision
support model. The results reveal the necessity of taking fixed setup cost into
account in decision support models for process flexibility problem.

References

  • Akbalik, A., B. Penz, C. Rapine (2015), “Capacitated Lot Sizing Problems with Inventory Bounds”, Annals of Operations Research, 229(1), 1-18.
  • Andreou, S.A. (1990), “A Capital Budgeting Model for Product-Mix Flexibility”, Manufacturing and Operations Management, 3(1), 5-23.
  • Axsäter, S. (2006), Inventory Control (Vol. 90), Springer Science & Business Media, New York, USA.
  • Baker, K.R., P. Dixon, M.J. Magazine, E.A. Silver (1978), “An Algorithm for the Dynamic Lot-Size Problem with Time-Varying Production Capacity Constraints”, Management Science, 24(16), 1710-1720.
  • Browne, J., D. Dubois, K. Rathmill, S.P. Sethi, K.E. Stecke (1984), “Classification of Flexible Manufacturing Systems”, The FMS magazine, 2(2), 114-117.
  • Chao, X., B. Yang, Y. Xu (2012), “Dynamic Inventory and Pricing Policy in a Capacitated Stochastic Inventory System with Fixed Ordering Cost”, Operations Research Letters, 40(2), 99-107.
  • Chen, H.D., D.W. Hearn, C.Y. Lee (1994), “A New Dynamic Programming Algorithm for the Single Item Capacitated Dynamic Lot Size Model”, Journal of Global Optimization, 4(3), 285-300.
  • Chou, M.C., C.P. Teo, H. Zheng (2008), “Process Flexibility: Design, Evaluation, and Applications”, Flexible Services and Manufacturing Journal, 20, 59-94.
  • Çimen, M., S. Belbağ (2015), “Süreç Esnekliği Varsayımı Altında Stokastik Stok Optimizasyonu Probleminin Dinamik Programlama ile Çözümü”, Gazi İktisadi ve İdari Bilimler Fakültesi Dergisi, 17(3), 255-270.
  • Çimen, M., S. Belbağ, M. Soysal (2016), “Üretimde Esneklik ve Stok Yönetimi: Stok Optimizasyonu İçin Bir Karar Destek Modeli”, İşletme Araştırmaları Dergisi, 8(1), 360-379.
  • Çimen, M., C. Kirkbride (2017), “Approximate Dynamic Programming Algorithms for Multidimensional Flexible Production-Inventory Problems.”, International Journal of Production Research, 55(7), 2034-2050.
  • Dennis, Z.Y., S.Y. Tang, J. Niederhoff (2011), On the Benefits of Operational Flexibility in a Distribution Network with Transshipment. Omega, 39(3), 350-361.
  • Diaby, M., H.C. Bahl, M.H. Karwan, S. Zionts (1992), “A Lagrangean Relaxation Approach for Very-Large-Scale Capacitated Lot-Sizing”, Management Science, 38(9), 1329-1340.
  • Fine, C.H., R.M. Freund (1990), “Optimal Investment in Product-Flexible Manufacturing Capacity”, Management Science, 36 (4), 449-466.
  • Gallego, G., A. Scheller-Wolf (2000), "Capacitated Inventory Problems with Fixed Order Costs: Some Optimal Policy Structure", European Journal of Operational Research, 126(3), 603-613.
  • Gustavson, Sten-Olof (1984), “Flexibility and Productivity in Complex Production Processes”, International Journal of Production Research, 22(5), 801-808.
  • He, P., Z. Chen, X. Xu (2011), “On Flexibility Investment in Manufacturing System: A Multi-Objective Decision Making Method”, Expert Systems with Applications, 38(9), 11813-11819.
  • Jaikumar, R. (1984), “Flexible Manufacturing Systems: A Managerial Perspective”, Harvard Business School, (Boston, MA), Jain, A., P.K. Jain, F.T.S. Chan, S. Singh (2013), “A Review on Manufacturing Flexibility”, International Journal of Production Research, 51(19), 5946–5970.
  • Jordan, W.C., S.C. Graves (1995), “Principles on the Benefits of Manufacturing Process Flexibility”, Management Sciences, 41(4), 577- 594.
  • Kleintje-Ell, F., G.P. Kiesmüller (2015), “Cost Minimising Order Schedules for a Capacitated Inventory System”, Annals of Operations Research, 229(1), 501-520.
  • Mandelbanm, M., J. Buzacott (1986), “Flexibility and Its Use: A Formal Decision Process and Manufacturing View”, Stecke, K.E. & Suri, R (der.) Proceedings of the Second ORSA/TIMS Conference on FMS (Ann Arbor, MI), Elsevier, Amsterdam, 119-130.
  • Özer, Ö., W. Wei (2004), “Inventory Control with Limited Capacity and Advance Demand Information”, Operations Research, 52(6), 988-1000.
  • Porteus, E.L. (1985), “Investing in Reduced Setups in The EOQ Model”, Management Science, 31(8), 998-1010.
  • Rao, U.S., J.M. Swaminathan, J. Zhang (2004), “Multi-Product Inventory Planning with Downward Substitution, Stochastic Demand and Setup Costs”, IIE Transactions, 36(1), 59-71.
  • Sethi, A.K., S.P. Sethi (1990), “Flexibility in Manufacturing: A Survey”, The International Journal of Flexible Manufacturing Systems, 2, 289-328. Shaoxiang, C. (2004), “The İnfinite Horizon Periodic Review Problem with Setup Costs and Capacity Constraints: A Partial Characterization of the Optimal Policy”, Operations Research, 52(3), 409-421.
  • Shaw, D.X., A.P. Wagelmans (1998), “An Algorithm for Single-Item Capacitated Economic Lot Sizing with Piecewise Linear Production Costs and General Holding Costs”, Management Science, 44(6), 831-838.
  • Shi, C., H. Zhang, X. Chao, R. Levi (2014), “Approximation Algorithms for Capacitated Stochastic Inventory Systems with Setup Costs”, Naval Research Logistics (NRL), 61(4), 304-319.
  • Son, Y.K., C.S. Park (1987), “Economic Measure of Productivity, Quality and Flexibility in Advanced Manufacturing Systems”, Journal of Manufacturing Systems, 6(3), 193-207.
  • Waters, D. (2003), Inventory Control and Management, John Wiley & Sons, Chichester, England.

SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ

Year 2018, Volume: 36 Issue: 1, 117 - 139, 30.03.2018
https://doi.org/10.17065/huniibf.411134

Abstract

Üretimde
süreç esnekliği, farklı ürünlerin minimum hazırlık maliyetiyle aynı üretim
tesisinde üretilmesini hedeflemektedir. Sabit üretim hazırlık maliyetinin
tamamen ortadan kalkması süreç esnekliği için yüksek seviyede yatırım yapılsa
bile, pek çok durumda mümkün değildir. Bu çalışmada, süreç esnekliğine sahip
sistemlerde stok kararlarının verilmesi için sabit hazırlık maliyetlerini
dikkate alan bir karar destek modeli sunulmuş ve sabit hazırlık maliyetlerinin
süreç esnekliğinde stok kararlarına etkisi araştırılmıştır. Bu çerçevede süreç
esnekliği problemi sabit hazırlık maliyeti göz önünde bulundurularak, karma tam
sayılı doğrusal programlama yöntemiyle modellenmiştir. Geliştirilen bu karar
destek modeli kullanılarak esnek olmayan, ikili zincir tasarımlı ve tam esnek
olmak üzere üç farklı üretim sistemi üzerinde değerlendirmeler yapılmıştır.
Elde edilen sonuçlar süreç esnekliği problemi için geliştirilen karar destek
modellerinde sabit üretim hazırlık maliyetinin göz önünde bulundurulmasının
gerekliliğini ortaya çıkarmaktadır.

 

References

  • Akbalik, A., B. Penz, C. Rapine (2015), “Capacitated Lot Sizing Problems with Inventory Bounds”, Annals of Operations Research, 229(1), 1-18.
  • Andreou, S.A. (1990), “A Capital Budgeting Model for Product-Mix Flexibility”, Manufacturing and Operations Management, 3(1), 5-23.
  • Axsäter, S. (2006), Inventory Control (Vol. 90), Springer Science & Business Media, New York, USA.
  • Baker, K.R., P. Dixon, M.J. Magazine, E.A. Silver (1978), “An Algorithm for the Dynamic Lot-Size Problem with Time-Varying Production Capacity Constraints”, Management Science, 24(16), 1710-1720.
  • Browne, J., D. Dubois, K. Rathmill, S.P. Sethi, K.E. Stecke (1984), “Classification of Flexible Manufacturing Systems”, The FMS magazine, 2(2), 114-117.
  • Chao, X., B. Yang, Y. Xu (2012), “Dynamic Inventory and Pricing Policy in a Capacitated Stochastic Inventory System with Fixed Ordering Cost”, Operations Research Letters, 40(2), 99-107.
  • Chen, H.D., D.W. Hearn, C.Y. Lee (1994), “A New Dynamic Programming Algorithm for the Single Item Capacitated Dynamic Lot Size Model”, Journal of Global Optimization, 4(3), 285-300.
  • Chou, M.C., C.P. Teo, H. Zheng (2008), “Process Flexibility: Design, Evaluation, and Applications”, Flexible Services and Manufacturing Journal, 20, 59-94.
  • Çimen, M., S. Belbağ (2015), “Süreç Esnekliği Varsayımı Altında Stokastik Stok Optimizasyonu Probleminin Dinamik Programlama ile Çözümü”, Gazi İktisadi ve İdari Bilimler Fakültesi Dergisi, 17(3), 255-270.
  • Çimen, M., S. Belbağ, M. Soysal (2016), “Üretimde Esneklik ve Stok Yönetimi: Stok Optimizasyonu İçin Bir Karar Destek Modeli”, İşletme Araştırmaları Dergisi, 8(1), 360-379.
  • Çimen, M., C. Kirkbride (2017), “Approximate Dynamic Programming Algorithms for Multidimensional Flexible Production-Inventory Problems.”, International Journal of Production Research, 55(7), 2034-2050.
  • Dennis, Z.Y., S.Y. Tang, J. Niederhoff (2011), On the Benefits of Operational Flexibility in a Distribution Network with Transshipment. Omega, 39(3), 350-361.
  • Diaby, M., H.C. Bahl, M.H. Karwan, S. Zionts (1992), “A Lagrangean Relaxation Approach for Very-Large-Scale Capacitated Lot-Sizing”, Management Science, 38(9), 1329-1340.
  • Fine, C.H., R.M. Freund (1990), “Optimal Investment in Product-Flexible Manufacturing Capacity”, Management Science, 36 (4), 449-466.
  • Gallego, G., A. Scheller-Wolf (2000), "Capacitated Inventory Problems with Fixed Order Costs: Some Optimal Policy Structure", European Journal of Operational Research, 126(3), 603-613.
  • Gustavson, Sten-Olof (1984), “Flexibility and Productivity in Complex Production Processes”, International Journal of Production Research, 22(5), 801-808.
  • He, P., Z. Chen, X. Xu (2011), “On Flexibility Investment in Manufacturing System: A Multi-Objective Decision Making Method”, Expert Systems with Applications, 38(9), 11813-11819.
  • Jaikumar, R. (1984), “Flexible Manufacturing Systems: A Managerial Perspective”, Harvard Business School, (Boston, MA), Jain, A., P.K. Jain, F.T.S. Chan, S. Singh (2013), “A Review on Manufacturing Flexibility”, International Journal of Production Research, 51(19), 5946–5970.
  • Jordan, W.C., S.C. Graves (1995), “Principles on the Benefits of Manufacturing Process Flexibility”, Management Sciences, 41(4), 577- 594.
  • Kleintje-Ell, F., G.P. Kiesmüller (2015), “Cost Minimising Order Schedules for a Capacitated Inventory System”, Annals of Operations Research, 229(1), 501-520.
  • Mandelbanm, M., J. Buzacott (1986), “Flexibility and Its Use: A Formal Decision Process and Manufacturing View”, Stecke, K.E. & Suri, R (der.) Proceedings of the Second ORSA/TIMS Conference on FMS (Ann Arbor, MI), Elsevier, Amsterdam, 119-130.
  • Özer, Ö., W. Wei (2004), “Inventory Control with Limited Capacity and Advance Demand Information”, Operations Research, 52(6), 988-1000.
  • Porteus, E.L. (1985), “Investing in Reduced Setups in The EOQ Model”, Management Science, 31(8), 998-1010.
  • Rao, U.S., J.M. Swaminathan, J. Zhang (2004), “Multi-Product Inventory Planning with Downward Substitution, Stochastic Demand and Setup Costs”, IIE Transactions, 36(1), 59-71.
  • Sethi, A.K., S.P. Sethi (1990), “Flexibility in Manufacturing: A Survey”, The International Journal of Flexible Manufacturing Systems, 2, 289-328. Shaoxiang, C. (2004), “The İnfinite Horizon Periodic Review Problem with Setup Costs and Capacity Constraints: A Partial Characterization of the Optimal Policy”, Operations Research, 52(3), 409-421.
  • Shaw, D.X., A.P. Wagelmans (1998), “An Algorithm for Single-Item Capacitated Economic Lot Sizing with Piecewise Linear Production Costs and General Holding Costs”, Management Science, 44(6), 831-838.
  • Shi, C., H. Zhang, X. Chao, R. Levi (2014), “Approximation Algorithms for Capacitated Stochastic Inventory Systems with Setup Costs”, Naval Research Logistics (NRL), 61(4), 304-319.
  • Son, Y.K., C.S. Park (1987), “Economic Measure of Productivity, Quality and Flexibility in Advanced Manufacturing Systems”, Journal of Manufacturing Systems, 6(3), 193-207.
  • Waters, D. (2003), Inventory Control and Management, John Wiley & Sons, Chichester, England.
There are 29 citations in total.

Details

Primary Language Turkish
Journal Section Articles
Authors

Mehmet Soysal

Mustafa Çimen

Sedat Belbağ

Publication Date March 30, 2018
Submission Date March 30, 2016
Published in Issue Year 2018 Volume: 36 Issue: 1

Cite

APA Soysal, M., Çimen, M., & Belbağ, S. (2018). SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ. Hacettepe Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 36(1), 117-139. https://doi.org/10.17065/huniibf.411134
AMA Soysal M, Çimen M, Belbağ S. SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi. March 2018;36(1):117-139. doi:10.17065/huniibf.411134
Chicago Soysal, Mehmet, Mustafa Çimen, and Sedat Belbağ. “SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ”. Hacettepe Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi 36, no. 1 (March 2018): 117-39. https://doi.org/10.17065/huniibf.411134.
EndNote Soysal M, Çimen M, Belbağ S (March 1, 2018) SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi 36 1 117–139.
IEEE M. Soysal, M. Çimen, and S. Belbağ, “SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ”, Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, vol. 36, no. 1, pp. 117–139, 2018, doi: 10.17065/huniibf.411134.
ISNAD Soysal, Mehmet et al. “SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ”. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi 36/1 (March 2018), 117-139. https://doi.org/10.17065/huniibf.411134.
JAMA Soysal M, Çimen M, Belbağ S. SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi. 2018;36:117–139.
MLA Soysal, Mehmet et al. “SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ”. Hacettepe Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, vol. 36, no. 1, 2018, pp. 117-39, doi:10.17065/huniibf.411134.
Vancouver Soysal M, Çimen M, Belbağ S. SABİT ÜRETİM HAZIRLIK MALİYETİNİN SÜREÇ ESNEKLİĞİNDE STOK OPTİMİZASYONUNA ETKİSİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi. 2018;36(1):117-39.

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