Abstract
Two production/inventory control systems are compared for a chemical process line that produces several different products, one at a time. Because of the complexity of the distribution system, little or no feedback information on inventory levels is available. Thus, a fixed production cycle schedule, based on long-range forecast, is used. This push type control results in low customer service and high setup costs when the production sequence must be altered to expedite production of a particular product. A pull type adaptive production scheduling policy is proposed which determines production runs by considering random demands and on-hand inventories. The information system costs must be justified by cost savings and increased customer service. Computer simulation is used to compare the average annual costs and service provided by each production policy for an actual chemical production line. Sensitivity and factor analysis results are also summarized.
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