In many manufacturing problems, the total lead time taken to manufacture a product is an important consideration. Long lead times impose costs due to higher work-in-process inventory, increased uncertainty about requirements, larger safety stocks and poorer performance to due dates. Traditional lot sizing models ignore lead time related costs, although there are systematic relationships between lot sizes and lead times. This paper examines these relationships and their implications for lot sizing and work-in-process inventories, for batch manufacturing shops with queues.inventory/production: policies, leadtime, queues: applications

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Supply chains often consist of several tiers, with different numbers of firms competing at each tier. A major determinant of the structure of supply chains is the cost structure associated with the underlying manufacturing process. In this paper, we examine the impact of fixed and variable costs on the structure and competitiveness of supply chains with a serial structure and price-sensitive linear deterministic demand. The entry stage is modeled as a simultaneous game, where the players take the outcomes of the subsequent post-entry (Cournot) competition into account in making their entry decisions. We derive expressions for prices and production quantities as functions of the number of entrants at each tier of a multitier chain. We characterize viability and stability of supply-chain structures and show, using lattice arguments, that there is always an equilibrium structure in pure strategies in the entry game. Finally, we examine the effects of vertical integration in the two-tier case. Altogether, the paper provides a framework for comparing a variety of supply-chain structures and for studying how they are affected by cost structures and by the number of entrants throughout the chain.Supply Chains, Competition, Pricing, Production, Entry, Fixed Costs

In this paper, we analyze the contracting issues that arise in collaborative services, such as consulting, financial planning, and IT outsourcing. Analyzing first a bilateral relationship, we assume that neither the buyer's nor the vendor's efforts are directly observable, resulting in double moral hazard. We investigate the efficiency of fixed-fee, time-and-materials, and performance-based contracts. We find that fixed-fee contracts are the least responsive to unplanned contingencies, time-and-material contracts are associated with high monitoring costs, and performance-based contracts do not incentivize agents to exert high levels of effort. We then show that our results are robust with respect to the number of vendors involved in the joint production process. On the other hand, the involvement of multiple buyers in the joint-production process creates an additional negative externality, akin to free riding, unless the vendor prescribes all buyers' actions. Our model highlights the trade-offs underlying the choice of contracts in a collaborative service environment and identifies service process design changes that improve contract efficiency.

The scheduling of lot sizes in multistage production environments is a fundamental problem in many Material Requirements Planning Systems. Many heuristics have been suggested for this problem with varying degrees of success. Research to date on obtaining optimal solutions has been limited to small problems. This paper presents a new formulation of the lot-sizing problem in multistage assembly systems which leads to an effective optimization algorithm for the problem. The problem is reformulated in terms of "echelon stock" which simplifies its decomposition by a Lagrangean relaxation method. A Branch and Bound algorithm which uses the bounds obtained by the relaxation was developed and tested. Computational results are reported on 120 randomly generated problems involving up to 50 items in 15 stages and up to 18 time periods in the planning horizon.MRP systems, lot sizing in MRP systems, multistage assembly systems

The production and delivery of services differ from manufacturing in ways which have a significant impact on the nature of market competition. Contracts for manufactured goods are centered around a clearly defined junction between production and use, made possible by the properties of tangibility and portability of tangible goods, at which point responsibility for use, operation and consumption of the product is transferred from producer to customer, along with ownership. Service operations, by contrast, involve a lack of inventories and portability, customer contact, joint production, customer-specific inputs, and intangibility in varying degrees. Moreover, service operations are either entirely post contractual or interlinked with the contracting process. As a result, the very nature of service markets and contracting depends on the characteristics of the service operation. While the operational consequences of service characteristics have been explored quite widely, there is less understanding of the special features of service competition and its implications for service strategy. We provide a framework for describing, analyzing and explaining service competition and review some old and new models which address the special features of service markets. 0272-6963/95/$09.50 © 1995 Elsevier Science B.V. All rights reserved SSDI 0272-6963(94)00014-X

Machine sequencing formulations typically assume that the characteristics of the job set to be processed are given. However, in many applications, jobs can be batched in different ways. Two types of minimum flow-time sequencing problems with lot sizing are formulated. The "item-flow" formulation is solved giving an index rule for ordering items. The "batch-flow" formulation is solved for the single product case showing that processing is done in unequal batches ordered in decreasing size. Heuristics and bounds are provided for the multiproduct case.production/scheduling, lot-sizing: closed shop, deterministic models

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