The economic lot and delivery scheduling problem: The single item case

We have studied the problem of determining the frequency of production of a single component and the frequency of delivery of that component to a customer which uses this component at a constant rate. The objective is to minimize the average cost per unit time of production setup costs, inventory holding costs at both the supplier and the customer, and transportation costs. The model allows positive production setup times. We prove that the ratio between the production interval and delivery interval must be an integer in an optimal solution. This provides the basis for a very simple, optimal solution procedure. We use these results to characterize situations in which it is optimal to have synchronized production and delivery, and discuss the ramifications of these conditions on strategies for setup cost and setup time reductions.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/29749/1/0000087.pd

The Economic Lot Production and Delivery Scheduling Problem.

This study deals with a manufacturing system with several (supplier) facilities that produce multiple component parts in batches, and one (assembly) facility at which these components are used at a constant rate while being assembled into finished goods. At each supplier, a set of components is produced on a single production line in a batch mode because of the time or cost involved in changeovers. The components are transported from the suppliers to the assembly facilities in mixed-component shipments at regular intervals. In practice, the production schedules at the suppliers and the inter-facility delivery schedules are well coordinated, resulting in cost penalties. We develop optimization-based procedures to determine coordinate production and delivery schedules while minimizing the total cost of production, inventory, and transportation for the entire system. We consider an infinite horizon problem and determine a schedule which can be repeated indefinitely. The decisions are the detailed production schedule which specifies both the timing and quantities of each production run of each component, and the time between deliveries. We develop an optimal solution procedure for the case of a single component. We then develop a heuristic procedure for the multiple component case in which the time between production runs (production interval) is the same for all components, and equal to the time between deliveries (delivery interval). We also develop error bounds for this heuristic procedure. This multiple-component model is then generalized to allow more frequent deliveries, while maintaining equal production intervals for all components. Finally, we consider the most general case where the delivery interval and the production intervals of all components may differ. For this case, we restrict our attention to "power-of-two" policies in which each delivery interval is a power-of-two multiple of the delivery interval. For the last two cases, heuristic solution procedures are developed. In computational tests, the new procedures provided solutions with costs up to 60% less than those from less coordinated solutions. These results suggest that considerable savings can be achieved by coordinating the production and delivery schedules. Our research represents a first step toward understanding how this coordination can be achieved most economically.Ph.D.Industrial and Operations EngineeringUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/103561/1/9034431.pdfDescription of 9034431.pdf : Restricted to UM users only

The economic lot and delivery scheduling problem : the common cycle case

http://deepblue.lib.umich.edu/bitstream/2027.42/5255/5/ban3100.0001.001.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/5255/4/ban3100.0001.001.tx

The economic lot and delivery scheduling problem powers of two policies

http://deepblue.lib.umich.edu/bitstream/2027.42/5252/5/bbl2267.0001.001.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/5252/4/bbl2267.0001.001.tx

The economic lot and delivery scheduling problem : models for nested schedules

http://deepblue.lib.umich.edu/bitstream/2027.42/5253/5/ban3091.0001.001.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/5253/4/ban3091.0001.001.tx

Coordination of investment decisions on marketing and logistics for the optimal supply chain operations

The purpose of this study is to coordinate investment decisions for marketing and logistics function in the operations of the supply chains. Although it is an important issue to coordinate these two decision factors in the supply chain operations, most of previous researches considered the two decisions separately. We provide a solution procedure to determine the optimal level of marketing activities and investment on logistics cost reduction. In this paper, we consider a distributor with three decision factors. First, the distributor can control demand to maximize profit through pricing. Second, the distributor can reduce ordering cost by investment on advanced logistics systems. Third, the distributor's investment on promotion enables additional demand. In order to define optimal integrated strategies, we establish a solution procedure to determine the optimal pricing and investment decisions, and provide four investment policies. Comparison of these policies shows that investment coordination between marketing and ordering cost reduction maximizes a distributor's profit by trade-offs. A detailed analysis is presented to describe managerial guidelines to make investment coordination under various conditions