Business Faculty Publications
Title
Optimal and Heuristic Lead-Time Quotation For an Integrated Steel Mill With a Minimum Batch Size
Document Type
Article
Publication Date
2011
Publication Title
European Journal of Operational Research
Keywords
Supply Chain Management
Disciplines
Business Administration, Management, and Operations
Abstract
This paper presents a model of lead-time policies for a production system, such as an integrated steel mill, in which the bottleneck process requires a minimum batch size. An accurate understanding of internal lead-time quotations is necessary for making good customer delivery-date promises, which must take into account processing time, queueing time and time for arrival of the requisite volume of orders to complete the minimum batch size requirement. The problem is modeled as a stochastic dynamic program with a large state space. A computational study demonstrates that lead time for an arriving order should generally be a decreasing function of the amount of that product already on order (and waiting for minimum batch size to accumulate), which leads to a very fast and accurate heuristic. The computational study also provides insights into the relationship between lead-time quotation, arrival rate, and the sensitivity of customers to the length of delivery promises.
Recommended Citation
Slotnick, S. A. (2011). "Optimal and Heuristic Lead-Time Quotation For an Integrated Steel Mill With a Minimum Batch Size". European Journal of Operational Research, 210, pp. 527–536.
DOI
10.1016/j.ejor.2010.09.031
Version
Postprint
Publisher's Statement
NOTICE: this is the author’s version of a work that was accepted for publication in European Journal of Operational Research. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in European Journal of Operational Research, 210 (2011), 10.1016/j.ejor.2010.09.031
Volume
210
