Articles

Priority optimization and make-to-stock/make-to-order decision in multiproduct manufacturing systems

K. Hadj Youssef, C. VAN DELFT, Y. Dallery

International Transactions in Operational Research

A paraître, pp.1-21

Départements : Information Systems and Operations Management, GREGHEC (CNRS)

Mots clés : make-to-stock (MTS); make-to-order (MTO); priority level; heterogeneous multiproduct produc-tion/inventory system; queuing model


We consider a single-stage multiproduct manufacturing facility producing a large number of end products.In order to reduce overall inventory costs, an efficient approach is to produce some items according to amake-to-stock (MTS) policy and others according to a make-to-order (MTO) policy. Items priority levelsplay a key role in the optimal MTO/MTS decisions for such typical large-scale systems. To tackle this issue,the manufacturing facility is modeled as a multiproduct multipriority classes queuing system. We proposea general optimization procedure that selects near-optimal priority classes, gives the associated flow controlmode (MTO or MTS) for each product, and provides a lower bound and an upper bound with respect to theoptimal cost. First, we illustrate efficiency of our optimization procedure for this class of nonlinear integerprograms via several examples and by a numerical analysis, including a comparison with two alternativeheuristics given in the literature. In addition, we provide managerial insights by exhibiting, under variousparameter settings, the significant impact of an efficient priority level allocation among items on the inventorycosts and on optimal splitting between MTO and MTS product


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