Single-Stage, Multi-Product Production/Inventory Systems

Abstract

A production/inventory system consisting of a single-stage facility producing multiple product types and a warehouse is considered. Demand process is assumed to be Poisson and the excess demand is backordered. Products have a priority structure and the processor is shared according to a switching rule. (R,r) continuous-review inventory control policy is used to start and stop production of each product. Production of a product continues until its target level is reached. Then, a switch-over takes place to the highest priority product a the ones that need the processor's attention. A set-up takes place every time a switch-over occurs. Both processing and set-up times are assumed to have arbitrary distributions. The objective is to obtain performances measures such as the average inventory and backorder levels as well as the probability of having a backorder upon arrival for each product. We have developed an approximation procedure which emphasizes the characterisation of the delay each product type experiences in receiving the processor's attention, once they place a request for it.