The Impact of Powers-of-Two Based Schedule on the Minimization of Inventory Costs in a Multi Product Manufacturing Environment

This paper discusses about the scheduling problem of a multi product manufacturing industry. Often there has been a problem of applying optimization algorithms to solve the makespan minimization criterion of a job shop due to its inherent NP-hard nature. It is therefore unrealistic to try obtaining a solution through a commercial solver in polynomial time. In this context, we propose a computationally effective heuristic, which is based on the powers-of-two policy in inventory, for solving the minimum makespan problem of job shop scheduling. The research discussed in the current paper is a real time scheduling problem faced by a large scale and complex turbine manufacturing job shop. It is worth noting that by integrating the material requirements planning (MRP) with the feasible schedule obtained, this policy also proves to be useful in minimizing the inventory costs

Collaboration in tool development and capacity investments in high technology manufacturing networks

The procurement of capital intensive tools for hi-tech industries is one of the most complex tasks. Astronomical amounts of capital are invested in the processing equipment. Further, there is a large effort from the original equipment manufacturer (OEM) in customizing the high capital intensive equipment to suit their production process. This problem has received little attention from the quantitative decision making literature. For the first time we analyze the problem of OEM deciding on collaborating with the tool supplier via a special type of contract which we refer as “collaboration options”. We show that there are benefits to both the OEM and the tool suppliers from the collaboration. We develop a two-stage strategic model for collaborative tool development and optimal capacity investment. In the first stage, we solve an optimal collaboration problem faced by the OEM. We formulate this problem as a discrete time stochastic stopping problem for a finite horizon. We use a policy iteration algorithm for deciding on optimal collaboration policy. In the second stage, we model the optimal investment decision of the OEM in tool development and capacity acquisition using real options theory. Unlike the traditional options literature, we consider the option value determined from the first stage model and decide on the optimal amount for investment

Predicting price-tag for customized goods

We discuss a dynamic pricing model which will aid automobile manufacturer in choosing the right price for customer segment. Though there is oligopoly market structure, the customers get "locked" into a particular technology/company which virtually makes the situation akin to a monopoly. There are associated network externalities and positive feedback. The key idea in monopoly pricing lies in extracting the customer surplus by exploiting the respective elasticities of demand. We present a Walrasian general equilibrium approach to determine the segment price. We compare the prices obtained from optimization model with that from Walrasian dynamics. The results are encouraging and can serve as a critical factor in Customer Relationship Management (CRM) and thereby effectively manage the lock-in

Theoretical Analysis on Powers-of-Two Applied to JSP

This paper discusses the scheduling of precedence-related jobs non-preemptively in a job shop environment with an objective of minimizing the makespan. Due to the NP-hard nature of the scheduling problems, it is usually difficult to find an exact optimal schedule and hence one should rely on finding a near to optimal solution. This paper proposes a computationally effective powers-of-two heuristic for solving job shop scheduling problem. The authors prove that the makespan obtained through powers-of-two release dates lies within 6% of the optimal value. The authors also prove the efficacy of powers-of-two approach through mathematical induction.</jats:p