Thecomposition of semi finished inventories at a solid board plant

A solid board factory produces rectangular sheets of cardboard in two different formats, namely large formats and small formats. The production process consists of two stages separated by an inventory point. In the first stage a cardboard machine produces the large formats. In the second stage a part of the large formats is cut into small formats by a separate rotary cut machine. Due to very large setup times, technical restrictions, and trim losses, the cardboard machine is not able to produce these small formats. The company follows two policies to satisfy customer demands for rotary cut format orders. When the company applies the first policy, then for each customer order an ‘optimal’ large format (with respect to trim loss) is determined and produced on the cardboard machine. In case of the second policy, a stock of a restricted number of large formats is determined in such a way that the expected trim loss is minimal. The rotary cut format order then uses the most suitable standard large format from the stock. Currently, the dimensions of the standard large formats in the semi finished inventory are based on intuitive motives, with an accent on minimizing trim losses. From the trim loss perspective it is most efficient to produce each rotary cut format from a specific large format. On the other hand, if there is only one large format in each caliper, the variety is minimal, but the trim loss might be inacceptably high. On average, the first policy results in a lower trim loss. In order to make efficiently use of the two machines and to meet customer’s due times the company applies both policies. In this paper we concentrate on the second policy, taking into account the various objectives and restrictions of the company. The purpose of the company is to have not too many different types of large formats and an acceptable amount of trim loss. The problem is formulated as a minimum clique covering problem with alternatives (MCCA), which is presumed to be NP-hard. We solve the problem by using an appropriate heuristic, which is built into a decision support system. Based on a set of real data, the actual composition of semi finished inventories is determined. The paper concludes with computational experiments.

Workload control concepts in job shops: a critical assessment

The paper considers a (static) portfolio system that satisfies adding-up contraints and the gross substitution theorem. The paper shows the relationship of the two conditions to the weak dominant diagonal property of the matrix of interest rate elasticities. This enables to investigate the impact of simultaneous changes in interest rates on the asset demands.

Exploring applicability of the workload control concept

To be successful in companies, a production planning and control (PPC) concept should fit to the production environment. Essential elements of the concept should correspond with the characteristics of the production system. For classical concepts such as MRP these elements have become common sense. For example BOMexplosion and constant lead times make MRP known to perform best in environments with high material and low capacity complexity. For many other concepts the situation is less clear. In this paper the Workload Control (WLC) concept is considered for which the requirements for a successful application have never been investigated. A framework is proposed to explore the applicability of WLC in small- to medium-sized make-to-order (MTO) companies. It supports an initial consideration of WLC in the first phase of a PPC selection and implementation process. As a first step in developing the framework the inherent characteristics of the WLC concept and the relevant MTO production characteristics are identified. Confronting the indicators of the company characteristics with the WLC elements results in bestfit indications for the WLC concept. Contrarily to other PPC evaluation schemes the framework considers variability indicators besides averages. Use of this framework for a medium sized MTO company demonstrates its suitability in getting a systematic and quick impression of the applicability of WLC. Essential elements are treated and assessed.

On the design of managerial incentives for sustainability investments in the presence of competitors

In many industries, an increasing number of firm owners tie managers’ incentives to sustainability investments. Positive rewards directly increase a manager's total pay when that manager makes sustainability investments, whereas negative rewards directly decrease a manager's pay when those investments are made. Strategic incentive design literature posits that such organizational choices also affect the decisions of a firm's competitors. This paper uses a game-theoretic framework to analyze the effects of sustainability incentives in a setting with two competing firms. In contrast to the existing literature, in the current paper sustainability investments have a demand-enhancing effect and can increase or decrease the unit cost of production, making the current framework more in line with industrial practice. The results show that a firm invests in sustainability only if the demand-enhancing effects outweigh the cost-increasing effects. More importantly, positively rewarding managers for sustainability investments is done in equilibrium only if the innovation capability of the firm is sufficiently high. However, in terms of profits, those positive rewards lead to a prisoner's dilemma. When innovation capability is lower, firm owners use negative rewards and raise their profits. Another finding is that rival firms that cooperate in determining their sustainability incentives increase their profits but do so using negative rewards. These results, which have not been reported in the literature, point to some critical trade-offs in terms of sustainability investments and firm profits when sustainability incentives are considered and are both managerially and academically relevant

Combined make-to-order and make-to-stock in a food production system

The research into multi-product production/inventory control systems has mainly assumed one of the two strategies: Make-to-Order (MTO) or Make-to-Stock (MTS). In practice, however, many companies cater to an increasing variety of products with varying logistical demands (e.g. short due dates, specific products) and production characteristics (e.g. capacity usage, setup) to different market segments and so they are moving to more MTO-production. As a consequence they operate under a hybrid MTO-MTS strategy. Important issues arising out of such situations are, for example, which products should be manufactured to stock and which ones on order and, how to allocate capacity among various MTO-MTS products. This paper presents the state-of-the-art literature review of the combined MTO-MTS production situations. A variety of production management issues in the context of food processing companies, where combined MTO-MTS production is quite common, are discussed in details. The authors propose a comprehensive hierarchical planning framework that covers the important production management decisions to serve as a starting point for evaluation and further research on the planning system for MTO-MTS situations.

Workload control concepts in job shops:a critical assessment

The paper considers a (static) portfolio system that satisfies adding-up contraints and the gross substitution theorem. The paper shows the relationship of the two conditions to the weak dominant diagonal property of the matrix of interest rate elasticities. This enables to investigate the impact of simultaneous changes in interest rates on the asset demands