1 AIT Asian Institute of Technology

Stochastic production planning and inventory control models with perishability and random yield

AuthorDe Castro, Edgar L.
Call NumberAIT Diss. no.IE-94-03
Subject(s)Production planning
Inventory control

NoteA dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Engineering, School of Engineering and Technology
PublisherAsian Institute of Technology
Series StatementDissertation ; no. IE-94-03
AbstractResearches in the field of production planning and inventory control have considered the effects of perishability and random yield on the optimal production order quantity separately and independently. At present, no single study has simultaneously incorporated both factors in the determination of the optimal number of units to produce in a manufacturing environment. The study involves the development of production planning and inventory control models which integrate both concepts. The models assume that both demand and yield are stochastic for a perishable product with capacity constraints. Three models wi th finite planning horizon are f01mulated. The first model considers an infinite lifetime case. The second model assumes that the product has a fixed lifetime of exactly one period. The third model assumes a fixed lifetime of two periods. Each model is analyzed for convexity to establish the existence of a minimum solution. The properties of the optimal solution are also investigated. Certain closed-form solutions are derived, whenever possible and appropriate. An actual case study is performed to validate the models formulated. The production planning and inventory control problem of a chocolate milk manufacturer is analyzed. An optimal production schedule is derived for the product and an exhaustive sensitivity analysis is performed. The results indicate that the use of the proposed models will reduce the total costs of production and inventory control of the product. The optimal solution also reveal that the occurrence of perishing using the proposed solution is not likely. Two scenarios which could be experienced by the host firm are investigated and provides meaningful insights into the inventory control decisions of the firm. The first scenario investigates the effects of shortening the lifetime of the product by 50% and proves to be beneficial. The second scenario provides an analysis of the situation where demand variability increases and mean demand decreases. In this case, perishability is shown to be extremely probable. The study demonstrates the utility and applicability of formulating and analyzing models which incorporate perishability, random demand and yield under a constrained environment. The attempt displays the ability of seemingly complicated mathematical formulations to resemble real-life situations and provide useful insights on the operation and management of such systems.
Year1994
Corresponding Series Added EntryAsian Institute of Technology. Dissertation ; no. IE-94-03
TypeDissertation
SchoolSchool of Engineering and Technology (SET)
DepartmentDepartment of Industrial Systems Engineering (DISE)
Academic Program/FoSIndustrial Engineering (IE)
Chairperson(s)Tabucanon, Mario T.;Nagarur, N.N.;
Examination Committee(s)H. N. Phien;Cheng, T.C.E.;
Scholarship Donor(s)Department of Science and Technology/ Republic of the Philippines;
DegreeThesis (Ph.D.) - Asian Institute of Technology, 1994


Usage Metrics
View Detail0
Read PDF0
Download PDF0