Horizontal integration management: An optimal switching model for parallel production system with multiple periods in smart supply chain environment

Abstract

Horizontal integration via a new generation of global value chain network is a main characteristic of Industry 4.0. As a contribution to the achievement of smart supply chain, optimal operation management for horizontal integration of production network has been paid attention to recently. This paper aims to derive an optimal switch model considering production, due date and quality for parallel production system with multiple periods in smart supply environment. Due to the customer needs of cost and delivery date shorting, prompt change in the production plan became more important. In the multi period system (For instance, production line.) where target processing time exists, production, idle and delay risks occur repeatedly for multiple periods. In such situations, delay of one period may influence the delivery date of an entire process. This kind of problem is called “a limited-cycle problem with multiple periods”, and is seen in production lines, time-bucket balancing, and production seat systems and so on. In this paper, we discuss minimum expected cost including production, due date and quality in a parallel production process, where the risk depends on the previous situation and occurs repeatedly throughout multiple periods. Also, the policy of optimal switching for parallel production system will be analysed. The results of numeric experiment in this paper show that the proposed optimal switching model can contribute to the scientific knowledge on the development of integrated solutions for parallel production system.