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International Journal of Mathematical, Engineering and Management Sciences

ISSN: 2455-7749 . Open Access


Multi-Item Production Lot Sizing with Postponement, External Source for Common Parts, and Adjustable Rate for End Products

Multi-Item Production Lot Sizing with Postponement, External Source for Common Parts, and Adjustable Rate for End Products

Singa Wang Chiu
Department of Business Administration, Chaoyang University of Technology, Taichung, Taiwan.

Hua Yao Wu
Physics Department College of Liberal Arts and Sciences, State University of New York, Oswego, NY, USA.

Tiffany Chiu
Anisfield School of Business, Ramapo College of New Jersey, Mahwah, NJ, USA.

Yuan-Shyi Peter Chiu
Department of Industrial Engineering & Management, Chaoyang University of Technology, Taichung, Taiwan.

DOI https://doi.org/10.33889/IJMEMS.2021.6.3.047

Received on December 17, 2020
  ;
Accepted on February 11, 2021

Abstract

This study considers a multi-item production lot-size problem incorporating postponement, an external source for common parts, and an adjustable-rate for end products. Dealing with product variety, timely requirements, and limited in-house capacity has led production managers to seek manufacturing schemes and utilization-reduction strategies that can help them meet customer needs, smoothen fabrication schedules, and lower overall manufacturing expenses. We propose a two-stage manufacturing scheme. The first stage produces common parts for multiproduct incorporating a partial supply from an outside contractor to reduce utilization/uptime. Stage two fabricates all end products using an adjustable-rate to reduce the uptime further. We build a model to characterize the problem’s features and use optimization methods to derive the optimal rotation cycle time in order to help managers make cost-effective lot-size decisions and allow manufacturers to gain competitive advantages. A numerical illustration validates the model’s capability and applicability. This study makes two important contributions: (1) It offers a decision-support model for studying such a particular batch-size problem and deciding the optimal rotation cycle time, and (2) it identifies the individual/collective influence of dual uptime-reduction strategies on the operating policy and various performance indexes to help facilitate managerial decision-making.

Keywords- Multi-item lot sizing, Two-stage fabrication scheme, Common parts, Postponement, External source, Adjustable rate.

Citation

Chiu, S. W., Wu, H. Y., Chiu, T., & Chiu, Y. P. (2021). Multi-Item Production Lot Sizing with Postponement, External Source for Common Parts, and Adjustable Rate for End Products. International Journal of Mathematical, Engineering and Management Sciences, 6(3), 787-804. https://doi.org/10.33889/IJMEMS.2021.6.3.047.