Comparing production control policies in two-product supply chain dynamics

Abstract

This paper deals with a comparison of production control policies in a two-product two-echelon supply chain dynamic problem with production capacity constraint. The factory related echelon consists of an unreliable manufacturing system that cannot produce both types of products simultaneously. Therefore, changeover operations are required to switch from one type of product to another. The decision on the product changeover depends on the production control policy. This research compares the well-known Hedging Corridor Policy, which has been previously adopted by the literature in a supply chain with production capacity constraints, and the Improved Modified Hedging Corridor Policy, which has been proved to minimize the total cost incurred in manufacturing companies characterized by unreliable production systems with constant demand rate. For comparison purposes, an experimental campaign was conducted through an analytical model based on discrete-time difference equations to investigate the Fill Rate of the multi-product supply chain as response variable. A proper ANDVA analysis and a set of interval plots revealed that the Hedging Corridor Policy outperforms the Improved Modified Hedging Corridor Policy in improving the Fill Rate Indicator.