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Operations sequencing for a multi‐stage production inventory system
Authors:Jim Shi  Xiaohang Yue  Yao Zhao
Affiliation:1. Department of Managerial Sciences, Robinson College of Business, Georgia State University, , Atlanta, Georgia;2. Sheldon B. Lubar School of Business, University of Wisconsin‐Milwaukee, , Milwaukee, Wisconsin;3. Department of Supply Chain Management and Marketing Sciences, Rutgers University, , Newark, New Jersey
Abstract:This article studies operations sequencing for a multi‐stage production inventory system with lead times under predictable (deterministic) yield losses and random demand. We consider various cases with either full or partial release of work‐in‐process inventories, for either pre‐operation or post‐operation cost structures, and under either the total discounted or average cost criteria. We derive necessary and sufficient criteria for the optimal sequence of operations in all cases. While the criteria differ in their specific forms, they all lead to the same principal: those operations with (1) lower yields, (2) lower processing costs, (3) longer lead times, and (4) lower inventory holding costs should be placed higher upstream in the system.Copyright © 2014 Wiley Periodicals, Inc. Naval Research Logistics 61: 144–154, 2014
Keywords:operations sequencing  yield loss  multi‐echelon inventory system  lead times
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