A modern manufacturing network, consisting of multiple manufacturing facilities and several external vendors, can be modeled as a multi-stage, capacitated, assembly system. We study one such model assuming centralized control and stochastic end-product demands.
Our analysis and approach is based on a concept of shortfall. First, we provide intuition and a clear algorithmic description for computing the optimal base-stock levels for an uncapacitated system. Second, an algorithm for optimal base stock level for a single stage capacitated system is derived. Third, using the proof technique for the single stage and the intuition for the uncapacitated multi-stage systems, we develop a heuristic algorithm for computing base-stock levels for multi-stage capacitated systems. Finally, test cases and computational results are presented for both the and capacitated models and the algorithms are used to analyze the control policies.
By: Pasumarti V. Kamesam, Sridhar Tayur
Published in: RC18971 in 1993
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