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This paper provides procedures for setting optimal, or near-optimal, basestock levels in a multi-product system with setups and random yield. The procedures are derived using a novel polling system model of the system that contains both queues for production order and queues for temporary storage of rework orders with routing occurring between these two types of queues. Both systems with backlogging and lost sales are analyzed using existing work on polling models with routing and possibly finite buffers. For a system with backlogging, we provide a cost function that is minimized by solving a set of single-item newsvendor problems. In systems with lost sales, each queue is given a finite buffer equal to the basestock level and excess demand is lost. We provide a cost function and show that finding optimal solutions for large problems is not tractable; thus, we provide a heuristic for finding the basestock levels and demonstrate the effectiveness of the heuristic and accuracy of the cost approximation through numerical tests. Keywords: Basestock, random yield, multi-product, setups, 1. Introduction Most production systems are characterized by multiple uncertainties, which cause output to be highly variable. When yield is random, not only is the usable quantity uncertain, but the [...]

The viability of finite buffer polling model with routing is examined.

Introduction of new products in the market results in cannibalization of the existing products. A study incorporating this cannibalization effect in forecasting models is presented.

FAULIN, JAVIER, ANGEL A. JUAN, SEBASTIAN MARTORELL, JOSE EMMANUEL RAMIREZMARQUEZ, EDS. 2010. Simulation Methods for Reliability and Availability of Complex Systems. Springer, New York. 312 pp. $169.00. Complex systems supporting [...]

Byline: Shrikant Jarugumilli, Scott E. Grasman In this paper, we provide a methodology for dynamic control of Radio Frequency Identification- (RFID-) enabled Inventory Routing Problems (IRP), where a set of locations is served by a single distribution centre using a Vendor-Managed Inventory (VMI) approach. In this scenario, RFID technology enables efficient control of inventory distribution by exchanging real-time information upon arrival to each location. This paper develops mathematical models that illustrate the substantial potential savings associated with the implementation of this technology, and provides a discussion of practical impediments to full application.

Byline: Scott E. Grasman By adopting multimodal logistics, global firms can significantly reduce lead time and inventory carrying costs, which may constitute major improvements in both profit and customer service. This paper presents dynamic programming formulations of multimodal logistics systems, which result in deterministic acyclic networks that may be solved using Dijkstra's algorithm. Using these models one can find both a least cost route and a least lead time route subjected to lead time and total cost, respectively. By combining these models, they may be used to make strategic decisions and to allow for system control in response to disruption. The presented model has both the analytical foundation and flexibility for application to a number of situations.

A case study on beverage company, which examines the impact of product cannibalization on product innovation and market share, is presented.