Assessing the Effect of a Novel Production Control Policy on a Two-Product, Failure-Prone Manufacturing/Distribution Scenario

This research deals with a production control policy for an unreliable manufacturing system handling two different types of product. Since the production line cannot produce both product families at the same time, setup operations are required to change the production mode. The decision on product changeover is guided by the production control policy, coping with capacity and inventory shortages due to long setup times and failure events. Usually, the literature adopts the Hedging Corridor Policy, which is optimal in a one-machine two-product reliable manufacturing system for minimizing the total backlog and inventory costs. However, the complexity of the problem increases whenever companies have to satisfy orders with high variability coming from a distribution chain. To address this problem, an analytical model based on discrete time difference equations and an extended experimental analysis have been accomplished to demonstrate the effectiveness of a new production control strategy, named Adaptive Hedging Corridor Policy.