Value of stock level information and impact on manufacturers' substitution decisions

Tore N., SAVAŞANERİL TÜFEKCİ S., SERİN Y. Y.

Communications - Scientific Letters of the University of Žilina, cilt.15, sa.1, ss.54-61, 2013 (Scopus) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 15 Sayı: 1
  • Basım Tarihi: 2013
  • Dergi Adı: Communications - Scientific Letters of the University of Žilina
  • Derginin Tarandığı İndeksler: Scopus
  • Sayfa Sayıları: ss.54-61
  • Anahtar Kelimeler: Product substitution, Production scheduling, Stochastic control of queues, Value of information
  • Orta Doğu Teknik Üniversitesi Adresli: Evet

Özet

In this work, we study the product substitution decisions of a manufacturer that produces multiple items. We first quantify the cost savings due to flexibility attained through substitution. Ideally, the manufacturer must use the stock level information when giving production, scheduling and substitution decisions. In practice however, such decisions are often given ignoring the available information. In this work, we also address the importance of using stock level information by quantifying its value. Results show that using stock level information is critical especially when taking production scheduling decisions.