Process Flexibility for Multi-Period Production Systems

64 Pages Posted: 5 Sep 2015 Last revised: 23 Jul 2018

See all articles by Cong Shi

Cong Shi

University of Michigan at Ann Arbor - Department of Industrial and Operations Engineering

Yehua Wei

Decision Sciences Area, Fuqua School of Business, Duke University

Yuan Zhong

University of Chicago - Booth School of Business

Date Written: July 12, 2018

Abstract

We develop a theory for the design of process flexibility in a multi-period make-to-order production system. We propose and formalize a notion of "effective chaining" termed the Generalized Chaining Gap (GCG), which can be viewed as a natural extension of classical chaining structure from the process flexibility literature. Using the GCG, we prove that in a general system with high capacity utilization, one only needs a sparse flexibility structure with m plus n arcs to achieve similar performance as full flexibility, where m and n are equal to the number of plants and products in the system, respectively. The proof provides a simple and efficient algorithm for finding such sparse structures. Also, we show that the requirement of m plus n arcs is tight, by explicitly constructing systems in which even the best flexibility structure with m plus n minus 1 arcs cannot achieve the same asymptotic performance as full flexibility. The goal of this paper is to make progress towards the better understanding of the key design principles of process flexibility structures in a multi-period environment.

Keywords: process flexibility, flexible production, multi-period, capacity planning, chaining condition

Suggested Citation

Shi, Cong and Wei, Yehua and Zhong, Yuan, Process Flexibility for Multi-Period Production Systems (July 12, 2018). Available at SSRN: https://ssrn.com/abstract=2655790 or http://dx.doi.org/10.2139/ssrn.2655790

Cong Shi

University of Michigan at Ann Arbor - Department of Industrial and Operations Engineering ( email )

1205 Beal Avenue
Ann Arbor, MI 48109
United States

Yehua Wei (Contact Author)

Decision Sciences Area, Fuqua School of Business, Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Yuan Zhong

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://faculty.chicagobooth.edu/Yuan.Zhong/

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