production seat booking system for the combination of make-to-order and make-to-stock products

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This article was downloaded by: [UQ Library] On: 11 November 2014, At: 01:03 Publisher: Taylor & Francis Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Production Planning & Control: The Management of Operations Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/tppc20 Production seat booking system for the combination of make-to-order and make-to- stock products Hitoshi Tsubone & Yoshikazu Kobayashi Published online: 06 Aug 2010. To cite this article: Hitoshi Tsubone & Yoshikazu Kobayashi (2002) Production seat booking system for the combination of make-to-order and make-to-stock products, Production Planning & Control: The Management of Operations, 13:4, 394-400, DOI: 10.1080/09537280210130487 To link to this article: http://dx.doi.org/10.1080/09537280210130487 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

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Page 1: Production seat booking system for the combination of make-to-order and make-to-stock products

This article was downloaded by [UQ Library]On 11 November 2014 At 0103Publisher Taylor amp FrancisInforma Ltd Registered in England and Wales Registered Number 1072954 Registered officeMortimer House 37-41 Mortimer Street London W1T 3JH UK

Production Planning amp Control TheManagement of OperationsPublication details including instructions for authors and subscriptioninformationhttpwwwtandfonlinecomloitppc20

Production seat booking system for thecombination of make-to-order and make-to-stock productsHitoshi Tsubone amp Yoshikazu KobayashiPublished online 06 Aug 2010

To cite this article Hitoshi Tsubone amp Yoshikazu Kobayashi (2002) Production seat booking system for thecombination of make-to-order and make-to-stock products Production Planning amp Control The Management ofOperations 134 394-400 DOI 10108009537280210130487

To link to this article httpdxdoiorg10108009537280210130487

PLEASE SCROLL DOWN FOR ARTICLE

Taylor amp Francis makes every effort to ensure the accuracy of all the information (the ldquoContentrdquo)contained in the publications on our platform However Taylor amp Francis our agents and ourlicensors make no representations or warranties whatsoever as to the accuracy completeness orsuitability for any purpose of the Content Any opinions and views expressed in this publication arethe opinions and views of the authors and are not the views of or endorsed by Taylor amp FrancisThe accuracy of the Content should not be relied upon and should be independently verified withprimary sources of information Taylor and Francis shall not be liable for any losses actionsclaims proceedings demands costs expenses damages and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with in relation to or arising out ofthe use of the Content

This article may be used for research teaching and private study purposes Any substantialor systematic reproduction redistribution reselling loan sub-licensing systematic supply ordistribution in any form to anyone is expressly forbidden Terms amp Conditions of access and usecan be found at httpwwwtandfonlinecompageterms-and-conditions

PRODUCTION PLANNING amp CONTROL 2002 VOL 13 NO 4 394plusmn400

Production seat booking system for thecombination of make-to-order and make-to-stockproducts

HITOSHI TSUBONE and YOSHIKAZU KOBAYASHI

Keywords production seat booking system make-to-stockproduct make-to-orderproducts ratio of delivery date achieve-ment unreglled-rate

Abstract This study deals with the problem of the productionseat booking system Like an airline or train booking systemcustomersrsquo orders are assigned a production seat Using theproduction seat booking system inquiries about the deliveryfor individual orders can be answered quickly The key issuesin the production seat booking system are (1) In which manu-facturing environments are the production seat booking systemappropriate and e cient (2) How should the production seatbe set (3) How should orders be assigned a production seat Aproduction planning model is formulated for a production seatbooking system with a combination of make-to-order and make-to-stock as production environment Two kinds of variables areset as policy in the model one is a variable for setting produc-tion capacity and the other a variable for assigning orders a

production seat By focusing on the characteristics of marketdemand this paper clarireges the following points (1) How dothese policy variables a ect the manufactuiring performance(2) How does the bu er inventory for make-to-stock producta ect the degree of the delivery date satisfaction for make-to-order products (3) Within what range should the two policyvariables be set in order to maintain the unreglled-rate of make-to-stock product under the specireged level and the degree ofdelivery date satisfaction for make-to-order products over thespecireged level This paper presents a basis for designing for aproduction seat booking system through a series of numericalexperiments

1 Introduction

Increasing market competition and the requirementsto serve the needs of diverse markets and for short deliv-

Authors H Tsubone and Y Kobayashi Tokyo Metropolitan Institute of Technology 6-6Asahigaoka Hino Tokyo 191-0065 Japan E-mail tsubonekrmgtbs1tmitacjp

Hitoshi Tsubone is a professor of Production Management at Tokyo Metropolitan Institute ofTechnology He received his Bachelor of Metallurgy from Ehime University in Japan and MS andPhD in Industrial Engineering from Waseda University in Japan He has published in InternationalJournal of Production Research Omega International Journal of Production Economics Journal of OperationalResearch International Journal of Decision Support Systems Decision Science Journal etc He has presentedpapers at various academic society meeting including DSI ORSATIMS ICPR His currentresearch activities focus on production planning and scheduling and macrexibility in the productionsystem

Yoshikazu Kobayashi is a researcher in Management Engineering at Tokyo MetropolitanInstitute of Technology His current research activities focus on production planning and control

Production Planning amp Control ISSN 0953plusmn7287 printISSN 1366plusmn5871 online 2002 Taylor amp Francis Ltdhttpwwwtandfcoukjournals

DOI 10108009537280210130487

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ery lead time have forced the design of a managementsystem which integrates the activities of sales and produc-tion departments whereby they can converse directly ona real-time basis using a common database The produc-tion seat booking system is a newly developed productionscheduling system in Japan which was developed basedon such an environment

The production seat booking system resembles an air-line booking system which assigns customersrsquo reservationcalls to a `bookrsquo of speciregc airline seats A booking seatgenerally represents the available time for processing forproduction capacity With conventional productionscheduling systems a production schedule is made afterorders have been received from customers In the con-ventional system one can only answer to customersrsquoinquiries regarding attainable or predictable deliverydates either through a simulation (Weeks 1979) basedon workload information (Udo 1993) or by using aninteractive scheduling system (Vivers 1983 Tsubone etal 1992 Hendry 1992) In contrast with the productionseat booking system production seats are prepared on thebasis of a master schedule developed under a mutualagreement between sales and production departmentsbefore orders are received The production seat bookingsystem can not only answer customersrsquo inquiries as towhether the order can be completed within their desireddelivery dates or not but can also answer accurately andquickly a feasible alternative delivery date based on theinformation provided by the production seat when theproduction schedule cannot satisfy customersrsquo desireddelivery dates

Some papers have introduced industrial applications inwhich production seat booking systems are e cient(Akuzawa 1994 Matoba et al 1994 Ohba et al 2000)However very few systematic studies have been con-ducted on the production seat booking system exceptfor that by Tamura et al (1997) where they present thee ectiveness of the production seat booking system bycomparing it with the conventional system

Fundamental questions remain to be answered regard-ing the design of an e cient production seat Theseinclude the following points

(1) In which manufacturing environments are theproduction seat booking system appropriate ande cient

(2) How should the production seats be set(3) How should orders received be assigned to the

production seats and what kinds of seats shouldbe assigned to incoming orders

In this paper is presented a method for designing aproduction seat booking system using a production modelfor a combination of a make-to-stock (MTS) and make-to-order (MTO) production system This model can

include the overall domain from a pure MTS productto a MTO products production system in view of themarket environment The unreglled rate with respect tothe market demand for MTS products and the ratio ofdelivery date achievement for MTO products are used asmeasures of manufacturing performance criteria

First how the manufacturing performance will bea ected by the design parameters is analysed for settingthe total number of production seats and the design par-ameters for setting macrexible production seats in whicheither MTS products or MTO products can be assignedSecond the relationship between these parameters isclarireged which controls both the unreglled rate for MTSproducts and the ratio of delivery date achievementwithin their acceptable levels

2 Production model for production seat bookingsystem

21 Market demand and production seat

The product range consists of a single standard MTSproduct which is made based on a forecast of the marketdemand and diverse MTO products which are producedaccording to individual customersrsquo requirementsDemand for MTS products and orders for MTO prod-ucts arrive at random in each given period indepen-dently The production process is a single-stageproduction system Individual MTO products havemutually di erent processing times because they haveindividual speciregcations

22 Procedure for production seat booking system

The production seat booking system is in a hierarch-ical fashion composed of master scheduling setting of thetotal number of production seats which includes setting amacrexible production seat assigning MTS and MTO prod-ucts to the production seat and order release into theproduction process as shown in table 1

(1) Master scheduleIn the master scheduling the production capacity in

week w is determined at the end of week w iexcl 2 on thebasis of forecasting the demand for MTS back orderswhich have not been completed for processing forMTO products at the end of week w iexcl 2 and the antici-pated incoming orders for MTO products The produc-tion capacity required Xw in week w is determined asfollows

Xw ˆ Rsw Dagger Zo

wiexcl2 Dagger Row 0 micro micro 1 hellip1dagger

Production seat booking system 395

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where Rsw is the required production capacities for the

MTS product which is determined on the basis of fore-casting demand in week w DDw the inventory level at theend of week w iexcl 1 Iwiexcl1 and the safety inventory level SIfor MTS product as follows

Rsw ˆ DDw Dagger SI iexcl Iwiexcl1 hellip2dagger

Zowiexcl2 is production capacities for processing time for

backlog of MTO products Row is the required produc-

tion capacity which is composed of anticipated incomingorders for MTO products Ro

w and a design parameter A part of MTO products can be loaded by setting the value A long idle time in the production process oftenoccurs and retention of excessive MTS product stockwould be unavoidable if the production capacity wereset based on the anticipation of all incoming ordersfor MTO products ie when ˆ 1 Unfortunatelythe manufacturing time would be lengthened becauseof insu cient production capacity if the productioncapacity for anticipation of incoming orders forMTO products is not taken into account at allwhen ˆ 0

Thus the design parameter acts as a determinant toset the total number of production seats for one week aswell as to alleviate these conmacricting situations The pro-duction capacity at week w is determined at the end ofweek w iexcl 2 in order to assign orders with delivery date inweek w which will arrive during week w iexcl 1

The production capacity Xw for one week is dividedinto daily portions so that daily production capacities areequal

Yt ˆ Xw=L hellip3dagger

where Yt is the daily production capacity that is thetotal number of production seats and L is the numberof days in the week which is set as regve in this studyImplementation of this procedure leads to smooth pro-duction throughout the week

(2) Setting production seatsThe production seat is set based on the master

schedule as shown in reggure 1Using the parameter the daily production seat at

week w for MTO products is set as follows

SEot ˆ hellipRo

w Dagger Zowiexcl2dagger=L hellip4dagger

where SEot is the production seat for MTO products on

day tThe daily production seat for the MTS product is set

by subtracting the production seat for MTO productsfrom the daily total number of production seats asfollows

SEst ˆ Yt iexcl SEo

t hellip5dagger(3) Setting a macrexible production seat

Using the parameter plusmn a part of the production seatfor the MTS product set to the macrexible seat can bechangeable to the production seat for MTO productswhen there is no production seat available to assignincoming orders for MTO products because all produc-tion seats have already been occupied The MTS productis assigned to a macrexible seat when there is a vacant seat forMTO products

Ft ˆ plusmn SEst hellip0 micro plusmn micro 1dagger hellip6dagger

where plusmn is the macrexible production seat on day t

(4) Assigning orders to the production seatThe basic assignment rule for assigning orders to the

production process is regrst come regrst assigned Howeverorders for MTO products are given a higher priority forusing the macrexible production seat over MTS productsbecause the MTS product has a bu er inventory toabsorb macructuations in market demand

(a) Assigning MTO productsIncoming orders for MTO products are regrst assigned

to the production seat for MTO products to meet the

396 H Tsubone and Y Kobayashi

Table 1 Overview of hierarchical production planning system

Types of planning Purpose of planning

Master schedule Determination of production capacityfor week w

Setting production seat Setting individual production seat forMTO and MTS products

Setting macrexible seat Setting macrexible production seats forMTS product to be changeable seatfor MTO products

Order assignment Assigning MTS and MTO productsto the production seats

Order releasing Order release of MTS and MTOproducts received into the productionprocess

Production seat for MTO products

nnn

nnnnnn

nnn

week w

t-L

week w-1week w-2

t-L+1 2

Production seat for MTS products

Production seat used up for MTO products

Production seat used up for MTS products

Production seat available for MTO products

Production seats for MTO products which have already been assigned

Production seats for MTS products availabl

Figure 1 Examples for setting production seat

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desired delivery date If there is no production seat avail-able because all the production seats for MTO productshave already been occupied the order is assigned to themacrexible production seat on the same day If the macrexibleproduction seat is also occupied by other orders theorder is assigned to the production seat prior to thedesired delivery day until the order can be assigned toany production seat However when the order cannot beassigned because all production seats for MTO productsand macrexible seat have already been occupied the order isassigned to the production seat for MTO productsbehind the delivery date (this means that there is noseat which can meet the customerrsquos desired deliverydate)

(b) Assigning MTS productsMTS products are allocated at the end of day t to

the production seat for MTS products on day t Dagger 1 andare also assigned to the macrexible seat on day t Dagger 1 when themacrexible seat is vacant

23 Manufacturing performance criteria

The following criteria are used to evaluate the manu-facturing performance in the simulation model

(1) Ratio of delivery date achievement not that is theratio of the number of orders that can be com-pleted for processing within their required deliverydates to the total number of orders

not ˆP

t deostP

t dethellip7dagger

where deost is the number of orders of MTO prod-

ucts which can be completed for processing within

their delivery dates and det is the total number oforders received

(2) Unreglled rate of market demand for MTS products

shy This is the inventory level for MTS products atthe end of day t dt is the market demand for MTSproducts on day t

shy ˆP

t maxhellipiexclI st 0daggerP

t dt

hellip8dagger

where It is the inventory level for MTS products at theend of day t and dt is the forecast demand for MTSproducts on day t

3 Numerical experiments and results

31 Purpose of the experiment

The purpose of the experiment is twofold The regrst is toanalyse how the manufacturing performance is a ectedby the design parameter for setting the total number ofproduction seats and the design parameter plusmn for setting amacrexible production seat under various factors and levelsThe second is to clarify through the results of these ana-lyses the relationship between these two design par-ameters which can control the ratio of delivery dateachievement for MTO products and the unreglled ratefor MTO products within their acceptable levels

32 Experimental conditions

Fluctuations in market demand for MTS products aregiven by a normally distributed random variable with amean of middotdd(unitday) and a coe cient of variance CVwhile the orders for MTO products arrive every dayaccording to a Poisson distribution with a mean ofmiddotparapara(unitday)

The unit processing time for MTO products is deter-mined using an Erlang distribution with a mean of 1 andphase of 10 while the unit processing time for MTSproducts is regxed at 1 The delivery date due to thecustomersrsquo requirements is generated from a uniformdistribution [3 5]

The variable frac12 is introduced for various experimentallevels That is frac12 is the ratio of the processing timerequired for MTO products to the total processing timerequired for both MTO and MTS products Thus byvarying the frac12 value from 0 to 1 the experiments can beconducted for various levels of combinations of MTSproducts and MTO products production systems Theforecast demand for MTS products and the anticipatedorders for MTO products were set to the expected valuesin the weekly planning Thus the standard deviation in

Production seat booking system 397

Processing time for MTO products arrived

Seat for MTO products

Seat for MT S products

Produc tion of MTO produc ts which cannot be assigned prior to their delivery da te

Occupied seat

Assigning prior to their delivery date

t+1 t+du t+du+1 t+du- 1

Flexible seat

1

234

3 2

Figure 2 Example for assigning MTO products (when MTOproducts cannot be assigned to the production seat for MTO

products)

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the demand for MTS and MTO products is equivalent tothe standard deviation frac14(ˆ cvd) and a root of middotdd respect-ively Having the bu er inventory for MTS productsunder various levels the experiments were conducted sothat the unreglled rate of MTS products can be controlledwithin a given value The experiments were also con-ducted over a period of 500 weeks Data for the regrst100 periods were discarded when computing the averagevalue All values were obtained by averaging the data fora simulated period of 400 weeks

33 Experimental results

Figure 3 shows the relationship between the parameter

for setting the total number of production seats and theratio of delivery date achievement not under the conditionthat the unreglled rate of MTS products shy can be con-trolled within 001 The rate of delivery date achievement

not increases as the value increases since the productionseats for MTO products increase in proportion to the value The slight increase of the value increases theratio of delivery date achievement for MTO productswhen the ratio frac12 of the number of orders for MTO prod-ucts to the total number of orders for MTO and MTSproducts is small Figure 4 shows the relationshipbetween the design parameter plusmn for macrexible productionseat and the delivery date achievement not when the

value is set to 10 under the condition that the shy valuecan be controlled within 001 The due delivery dateincreases as the parameter for the macrexible seat plusmn increasesbecause the production seats available for MTO productsincrease Figure 5 shows the relationship between thedesign parameter for macrexible production seats and therequired bu er inventory for MTS products which can

398 H Tsubone and Y Kobayashi

Parameter for the setting the total number of productionseats

Rat

io o

f de

liver

y da

te a

chie

vem

ent

Figure 3 Relationship between the parameter for setting thetotal number of production seats and the ratio of delivery date

achievement not under the condition that the unreglled rate ofMTS products shy can be controlled within 001

Design parameter for flexible production seat

Rat

io o

f de

liver

y da

te a

chiv

emen

t

Figure 4 Relationship between design parameter plusmn for macrexibleproduction seat and delivery date achievement not when the

value is set to 10 under the condition that the shy value can becontrolled within 001

Design parameter for flexible production seat

Req

uire

d bu

ffer

inve

ntor

y fo

r M

TS

pro

duct

s

Figure 5 Relationship between the design parameter for macrex-ible production seat and the required bu er inventory for MTS

products which can control the unreglled-rate within 001

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control the unreglled-rate within 001 when the value isset to 05

As the plusmn value increases the bu er inventory levelincreases because the production seats for MTO productsincrease resulting in a decrease in the number of produc-tion seats available for MTS products Figure 6 shows therelationship between the bu er inventory level for MTSproducts and the delivery date achievement for MTOproducts while varying the design parameter for macrexibleproduction seats The achievement not for MTO productsis not a ected by the bu er inventory level for MTSproducts under the condition that the value is largeenough to satisfy high delivery date achievementHowever when the value is small the delivery dateachievement also increases as the bu er inventory levelfor MTS products increases

Figures 7 and 8 show the domain in which both thedelivery date achievement not for MTO products and theunreglled rate shy for MTS product can be maintainedwithin the acceptable limits The domain can be speciregedby two design parameters for setting the total number ofproduction seats and macrexible production seats if themanagement sets the desired delivery date and theunreglled-rate Figure 7 shows the domain indicated bydark shading in which the not value and shy value can bemaintained at more than 095 and less than 005 respect-ively varying the ratio of orders frac12 for MTO products tothe total orders for both MTO and MTS products underthe condition that the bu er inventory level SI for MTSproducts is regxed at 02 (mean demandweek) Similarlyreggure 8 shows the domain under the various bu er

Production seat booking system 399

Buffer inventory level for MT products

Del

iver

y da

te a

chie

vem

ent f

or M

TO

pro

duct

s

S

Figure 6 Relationship between the bu er inventory level forMTS products and delivery date achievement for MTO prod-ucts while varying design parameter for macrexible production seat

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

fle

xibl

e pr

oduc

tion

seat

Figure 7 Domain in which the not value and shy value can bemaintained at more than 095 and less than 005 respectivelyvarying raqtio frac12 of the number of orders for MTO products tothe total number of orders for both MTO and MTS productswhen the bu er inventory level Si for MTS products is regxed at

02

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

set

ting

fle

xibl

e pr

oduc

tion

sea

t

Figure 8 Domain indicated in dark shading in which the notvalue and shy value can be maintained at more than 095 and lessthan 005 respectively under the various bu er inventory levels

for MTS products when the frac12 value is regxed at 05

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inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

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Page 2: Production seat booking system for the combination of make-to-order and make-to-stock products

PRODUCTION PLANNING amp CONTROL 2002 VOL 13 NO 4 394plusmn400

Production seat booking system for thecombination of make-to-order and make-to-stockproducts

HITOSHI TSUBONE and YOSHIKAZU KOBAYASHI

Keywords production seat booking system make-to-stockproduct make-to-orderproducts ratio of delivery date achieve-ment unreglled-rate

Abstract This study deals with the problem of the productionseat booking system Like an airline or train booking systemcustomersrsquo orders are assigned a production seat Using theproduction seat booking system inquiries about the deliveryfor individual orders can be answered quickly The key issuesin the production seat booking system are (1) In which manu-facturing environments are the production seat booking systemappropriate and e cient (2) How should the production seatbe set (3) How should orders be assigned a production seat Aproduction planning model is formulated for a production seatbooking system with a combination of make-to-order and make-to-stock as production environment Two kinds of variables areset as policy in the model one is a variable for setting produc-tion capacity and the other a variable for assigning orders a

production seat By focusing on the characteristics of marketdemand this paper clarireges the following points (1) How dothese policy variables a ect the manufactuiring performance(2) How does the bu er inventory for make-to-stock producta ect the degree of the delivery date satisfaction for make-to-order products (3) Within what range should the two policyvariables be set in order to maintain the unreglled-rate of make-to-stock product under the specireged level and the degree ofdelivery date satisfaction for make-to-order products over thespecireged level This paper presents a basis for designing for aproduction seat booking system through a series of numericalexperiments

1 Introduction

Increasing market competition and the requirementsto serve the needs of diverse markets and for short deliv-

Authors H Tsubone and Y Kobayashi Tokyo Metropolitan Institute of Technology 6-6Asahigaoka Hino Tokyo 191-0065 Japan E-mail tsubonekrmgtbs1tmitacjp

Hitoshi Tsubone is a professor of Production Management at Tokyo Metropolitan Institute ofTechnology He received his Bachelor of Metallurgy from Ehime University in Japan and MS andPhD in Industrial Engineering from Waseda University in Japan He has published in InternationalJournal of Production Research Omega International Journal of Production Economics Journal of OperationalResearch International Journal of Decision Support Systems Decision Science Journal etc He has presentedpapers at various academic society meeting including DSI ORSATIMS ICPR His currentresearch activities focus on production planning and scheduling and macrexibility in the productionsystem

Yoshikazu Kobayashi is a researcher in Management Engineering at Tokyo MetropolitanInstitute of Technology His current research activities focus on production planning and control

Production Planning amp Control ISSN 0953plusmn7287 printISSN 1366plusmn5871 online 2002 Taylor amp Francis Ltdhttpwwwtandfcoukjournals

DOI 10108009537280210130487

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

ery lead time have forced the design of a managementsystem which integrates the activities of sales and produc-tion departments whereby they can converse directly ona real-time basis using a common database The produc-tion seat booking system is a newly developed productionscheduling system in Japan which was developed basedon such an environment

The production seat booking system resembles an air-line booking system which assigns customersrsquo reservationcalls to a `bookrsquo of speciregc airline seats A booking seatgenerally represents the available time for processing forproduction capacity With conventional productionscheduling systems a production schedule is made afterorders have been received from customers In the con-ventional system one can only answer to customersrsquoinquiries regarding attainable or predictable deliverydates either through a simulation (Weeks 1979) basedon workload information (Udo 1993) or by using aninteractive scheduling system (Vivers 1983 Tsubone etal 1992 Hendry 1992) In contrast with the productionseat booking system production seats are prepared on thebasis of a master schedule developed under a mutualagreement between sales and production departmentsbefore orders are received The production seat bookingsystem can not only answer customersrsquo inquiries as towhether the order can be completed within their desireddelivery dates or not but can also answer accurately andquickly a feasible alternative delivery date based on theinformation provided by the production seat when theproduction schedule cannot satisfy customersrsquo desireddelivery dates

Some papers have introduced industrial applications inwhich production seat booking systems are e cient(Akuzawa 1994 Matoba et al 1994 Ohba et al 2000)However very few systematic studies have been con-ducted on the production seat booking system exceptfor that by Tamura et al (1997) where they present thee ectiveness of the production seat booking system bycomparing it with the conventional system

Fundamental questions remain to be answered regard-ing the design of an e cient production seat Theseinclude the following points

(1) In which manufacturing environments are theproduction seat booking system appropriate ande cient

(2) How should the production seats be set(3) How should orders received be assigned to the

production seats and what kinds of seats shouldbe assigned to incoming orders

In this paper is presented a method for designing aproduction seat booking system using a production modelfor a combination of a make-to-stock (MTS) and make-to-order (MTO) production system This model can

include the overall domain from a pure MTS productto a MTO products production system in view of themarket environment The unreglled rate with respect tothe market demand for MTS products and the ratio ofdelivery date achievement for MTO products are used asmeasures of manufacturing performance criteria

First how the manufacturing performance will bea ected by the design parameters is analysed for settingthe total number of production seats and the design par-ameters for setting macrexible production seats in whicheither MTS products or MTO products can be assignedSecond the relationship between these parameters isclarireged which controls both the unreglled rate for MTSproducts and the ratio of delivery date achievementwithin their acceptable levels

2 Production model for production seat bookingsystem

21 Market demand and production seat

The product range consists of a single standard MTSproduct which is made based on a forecast of the marketdemand and diverse MTO products which are producedaccording to individual customersrsquo requirementsDemand for MTS products and orders for MTO prod-ucts arrive at random in each given period indepen-dently The production process is a single-stageproduction system Individual MTO products havemutually di erent processing times because they haveindividual speciregcations

22 Procedure for production seat booking system

The production seat booking system is in a hierarch-ical fashion composed of master scheduling setting of thetotal number of production seats which includes setting amacrexible production seat assigning MTS and MTO prod-ucts to the production seat and order release into theproduction process as shown in table 1

(1) Master scheduleIn the master scheduling the production capacity in

week w is determined at the end of week w iexcl 2 on thebasis of forecasting the demand for MTS back orderswhich have not been completed for processing forMTO products at the end of week w iexcl 2 and the antici-pated incoming orders for MTO products The produc-tion capacity required Xw in week w is determined asfollows

Xw ˆ Rsw Dagger Zo

wiexcl2 Dagger Row 0 micro micro 1 hellip1dagger

Production seat booking system 395

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where Rsw is the required production capacities for the

MTS product which is determined on the basis of fore-casting demand in week w DDw the inventory level at theend of week w iexcl 1 Iwiexcl1 and the safety inventory level SIfor MTS product as follows

Rsw ˆ DDw Dagger SI iexcl Iwiexcl1 hellip2dagger

Zowiexcl2 is production capacities for processing time for

backlog of MTO products Row is the required produc-

tion capacity which is composed of anticipated incomingorders for MTO products Ro

w and a design parameter A part of MTO products can be loaded by setting the value A long idle time in the production process oftenoccurs and retention of excessive MTS product stockwould be unavoidable if the production capacity wereset based on the anticipation of all incoming ordersfor MTO products ie when ˆ 1 Unfortunatelythe manufacturing time would be lengthened becauseof insu cient production capacity if the productioncapacity for anticipation of incoming orders forMTO products is not taken into account at allwhen ˆ 0

Thus the design parameter acts as a determinant toset the total number of production seats for one week aswell as to alleviate these conmacricting situations The pro-duction capacity at week w is determined at the end ofweek w iexcl 2 in order to assign orders with delivery date inweek w which will arrive during week w iexcl 1

The production capacity Xw for one week is dividedinto daily portions so that daily production capacities areequal

Yt ˆ Xw=L hellip3dagger

where Yt is the daily production capacity that is thetotal number of production seats and L is the numberof days in the week which is set as regve in this studyImplementation of this procedure leads to smooth pro-duction throughout the week

(2) Setting production seatsThe production seat is set based on the master

schedule as shown in reggure 1Using the parameter the daily production seat at

week w for MTO products is set as follows

SEot ˆ hellipRo

w Dagger Zowiexcl2dagger=L hellip4dagger

where SEot is the production seat for MTO products on

day tThe daily production seat for the MTS product is set

by subtracting the production seat for MTO productsfrom the daily total number of production seats asfollows

SEst ˆ Yt iexcl SEo

t hellip5dagger(3) Setting a macrexible production seat

Using the parameter plusmn a part of the production seatfor the MTS product set to the macrexible seat can bechangeable to the production seat for MTO productswhen there is no production seat available to assignincoming orders for MTO products because all produc-tion seats have already been occupied The MTS productis assigned to a macrexible seat when there is a vacant seat forMTO products

Ft ˆ plusmn SEst hellip0 micro plusmn micro 1dagger hellip6dagger

where plusmn is the macrexible production seat on day t

(4) Assigning orders to the production seatThe basic assignment rule for assigning orders to the

production process is regrst come regrst assigned Howeverorders for MTO products are given a higher priority forusing the macrexible production seat over MTS productsbecause the MTS product has a bu er inventory toabsorb macructuations in market demand

(a) Assigning MTO productsIncoming orders for MTO products are regrst assigned

to the production seat for MTO products to meet the

396 H Tsubone and Y Kobayashi

Table 1 Overview of hierarchical production planning system

Types of planning Purpose of planning

Master schedule Determination of production capacityfor week w

Setting production seat Setting individual production seat forMTO and MTS products

Setting macrexible seat Setting macrexible production seats forMTS product to be changeable seatfor MTO products

Order assignment Assigning MTS and MTO productsto the production seats

Order releasing Order release of MTS and MTOproducts received into the productionprocess

Production seat for MTO products

nnn

nnnnnn

nnn

week w

t-L

week w-1week w-2

t-L+1 2

Production seat for MTS products

Production seat used up for MTO products

Production seat used up for MTS products

Production seat available for MTO products

Production seats for MTO products which have already been assigned

Production seats for MTS products availabl

Figure 1 Examples for setting production seat

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desired delivery date If there is no production seat avail-able because all the production seats for MTO productshave already been occupied the order is assigned to themacrexible production seat on the same day If the macrexibleproduction seat is also occupied by other orders theorder is assigned to the production seat prior to thedesired delivery day until the order can be assigned toany production seat However when the order cannot beassigned because all production seats for MTO productsand macrexible seat have already been occupied the order isassigned to the production seat for MTO productsbehind the delivery date (this means that there is noseat which can meet the customerrsquos desired deliverydate)

(b) Assigning MTS productsMTS products are allocated at the end of day t to

the production seat for MTS products on day t Dagger 1 andare also assigned to the macrexible seat on day t Dagger 1 when themacrexible seat is vacant

23 Manufacturing performance criteria

The following criteria are used to evaluate the manu-facturing performance in the simulation model

(1) Ratio of delivery date achievement not that is theratio of the number of orders that can be com-pleted for processing within their required deliverydates to the total number of orders

not ˆP

t deostP

t dethellip7dagger

where deost is the number of orders of MTO prod-

ucts which can be completed for processing within

their delivery dates and det is the total number oforders received

(2) Unreglled rate of market demand for MTS products

shy This is the inventory level for MTS products atthe end of day t dt is the market demand for MTSproducts on day t

shy ˆP

t maxhellipiexclI st 0daggerP

t dt

hellip8dagger

where It is the inventory level for MTS products at theend of day t and dt is the forecast demand for MTSproducts on day t

3 Numerical experiments and results

31 Purpose of the experiment

The purpose of the experiment is twofold The regrst is toanalyse how the manufacturing performance is a ectedby the design parameter for setting the total number ofproduction seats and the design parameter plusmn for setting amacrexible production seat under various factors and levelsThe second is to clarify through the results of these ana-lyses the relationship between these two design par-ameters which can control the ratio of delivery dateachievement for MTO products and the unreglled ratefor MTO products within their acceptable levels

32 Experimental conditions

Fluctuations in market demand for MTS products aregiven by a normally distributed random variable with amean of middotdd(unitday) and a coe cient of variance CVwhile the orders for MTO products arrive every dayaccording to a Poisson distribution with a mean ofmiddotparapara(unitday)

The unit processing time for MTO products is deter-mined using an Erlang distribution with a mean of 1 andphase of 10 while the unit processing time for MTSproducts is regxed at 1 The delivery date due to thecustomersrsquo requirements is generated from a uniformdistribution [3 5]

The variable frac12 is introduced for various experimentallevels That is frac12 is the ratio of the processing timerequired for MTO products to the total processing timerequired for both MTO and MTS products Thus byvarying the frac12 value from 0 to 1 the experiments can beconducted for various levels of combinations of MTSproducts and MTO products production systems Theforecast demand for MTS products and the anticipatedorders for MTO products were set to the expected valuesin the weekly planning Thus the standard deviation in

Production seat booking system 397

Processing time for MTO products arrived

Seat for MTO products

Seat for MT S products

Produc tion of MTO produc ts which cannot be assigned prior to their delivery da te

Occupied seat

Assigning prior to their delivery date

t+1 t+du t+du+1 t+du- 1

Flexible seat

1

234

3 2

Figure 2 Example for assigning MTO products (when MTOproducts cannot be assigned to the production seat for MTO

products)

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the demand for MTS and MTO products is equivalent tothe standard deviation frac14(ˆ cvd) and a root of middotdd respect-ively Having the bu er inventory for MTS productsunder various levels the experiments were conducted sothat the unreglled rate of MTS products can be controlledwithin a given value The experiments were also con-ducted over a period of 500 weeks Data for the regrst100 periods were discarded when computing the averagevalue All values were obtained by averaging the data fora simulated period of 400 weeks

33 Experimental results

Figure 3 shows the relationship between the parameter

for setting the total number of production seats and theratio of delivery date achievement not under the conditionthat the unreglled rate of MTS products shy can be con-trolled within 001 The rate of delivery date achievement

not increases as the value increases since the productionseats for MTO products increase in proportion to the value The slight increase of the value increases theratio of delivery date achievement for MTO productswhen the ratio frac12 of the number of orders for MTO prod-ucts to the total number of orders for MTO and MTSproducts is small Figure 4 shows the relationshipbetween the design parameter plusmn for macrexible productionseat and the delivery date achievement not when the

value is set to 10 under the condition that the shy valuecan be controlled within 001 The due delivery dateincreases as the parameter for the macrexible seat plusmn increasesbecause the production seats available for MTO productsincrease Figure 5 shows the relationship between thedesign parameter for macrexible production seats and therequired bu er inventory for MTS products which can

398 H Tsubone and Y Kobayashi

Parameter for the setting the total number of productionseats

Rat

io o

f de

liver

y da

te a

chie

vem

ent

Figure 3 Relationship between the parameter for setting thetotal number of production seats and the ratio of delivery date

achievement not under the condition that the unreglled rate ofMTS products shy can be controlled within 001

Design parameter for flexible production seat

Rat

io o

f de

liver

y da

te a

chiv

emen

t

Figure 4 Relationship between design parameter plusmn for macrexibleproduction seat and delivery date achievement not when the

value is set to 10 under the condition that the shy value can becontrolled within 001

Design parameter for flexible production seat

Req

uire

d bu

ffer

inve

ntor

y fo

r M

TS

pro

duct

s

Figure 5 Relationship between the design parameter for macrex-ible production seat and the required bu er inventory for MTS

products which can control the unreglled-rate within 001

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control the unreglled-rate within 001 when the value isset to 05

As the plusmn value increases the bu er inventory levelincreases because the production seats for MTO productsincrease resulting in a decrease in the number of produc-tion seats available for MTS products Figure 6 shows therelationship between the bu er inventory level for MTSproducts and the delivery date achievement for MTOproducts while varying the design parameter for macrexibleproduction seats The achievement not for MTO productsis not a ected by the bu er inventory level for MTSproducts under the condition that the value is largeenough to satisfy high delivery date achievementHowever when the value is small the delivery dateachievement also increases as the bu er inventory levelfor MTS products increases

Figures 7 and 8 show the domain in which both thedelivery date achievement not for MTO products and theunreglled rate shy for MTS product can be maintainedwithin the acceptable limits The domain can be speciregedby two design parameters for setting the total number ofproduction seats and macrexible production seats if themanagement sets the desired delivery date and theunreglled-rate Figure 7 shows the domain indicated bydark shading in which the not value and shy value can bemaintained at more than 095 and less than 005 respect-ively varying the ratio of orders frac12 for MTO products tothe total orders for both MTO and MTS products underthe condition that the bu er inventory level SI for MTSproducts is regxed at 02 (mean demandweek) Similarlyreggure 8 shows the domain under the various bu er

Production seat booking system 399

Buffer inventory level for MT products

Del

iver

y da

te a

chie

vem

ent f

or M

TO

pro

duct

s

S

Figure 6 Relationship between the bu er inventory level forMTS products and delivery date achievement for MTO prod-ucts while varying design parameter for macrexible production seat

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

fle

xibl

e pr

oduc

tion

seat

Figure 7 Domain in which the not value and shy value can bemaintained at more than 095 and less than 005 respectivelyvarying raqtio frac12 of the number of orders for MTO products tothe total number of orders for both MTO and MTS productswhen the bu er inventory level Si for MTS products is regxed at

02

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

set

ting

fle

xibl

e pr

oduc

tion

sea

t

Figure 8 Domain indicated in dark shading in which the notvalue and shy value can be maintained at more than 095 and lessthan 005 respectively under the various bu er inventory levels

for MTS products when the frac12 value is regxed at 05

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inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

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Page 3: Production seat booking system for the combination of make-to-order and make-to-stock products

ery lead time have forced the design of a managementsystem which integrates the activities of sales and produc-tion departments whereby they can converse directly ona real-time basis using a common database The produc-tion seat booking system is a newly developed productionscheduling system in Japan which was developed basedon such an environment

The production seat booking system resembles an air-line booking system which assigns customersrsquo reservationcalls to a `bookrsquo of speciregc airline seats A booking seatgenerally represents the available time for processing forproduction capacity With conventional productionscheduling systems a production schedule is made afterorders have been received from customers In the con-ventional system one can only answer to customersrsquoinquiries regarding attainable or predictable deliverydates either through a simulation (Weeks 1979) basedon workload information (Udo 1993) or by using aninteractive scheduling system (Vivers 1983 Tsubone etal 1992 Hendry 1992) In contrast with the productionseat booking system production seats are prepared on thebasis of a master schedule developed under a mutualagreement between sales and production departmentsbefore orders are received The production seat bookingsystem can not only answer customersrsquo inquiries as towhether the order can be completed within their desireddelivery dates or not but can also answer accurately andquickly a feasible alternative delivery date based on theinformation provided by the production seat when theproduction schedule cannot satisfy customersrsquo desireddelivery dates

Some papers have introduced industrial applications inwhich production seat booking systems are e cient(Akuzawa 1994 Matoba et al 1994 Ohba et al 2000)However very few systematic studies have been con-ducted on the production seat booking system exceptfor that by Tamura et al (1997) where they present thee ectiveness of the production seat booking system bycomparing it with the conventional system

Fundamental questions remain to be answered regard-ing the design of an e cient production seat Theseinclude the following points

(1) In which manufacturing environments are theproduction seat booking system appropriate ande cient

(2) How should the production seats be set(3) How should orders received be assigned to the

production seats and what kinds of seats shouldbe assigned to incoming orders

In this paper is presented a method for designing aproduction seat booking system using a production modelfor a combination of a make-to-stock (MTS) and make-to-order (MTO) production system This model can

include the overall domain from a pure MTS productto a MTO products production system in view of themarket environment The unreglled rate with respect tothe market demand for MTS products and the ratio ofdelivery date achievement for MTO products are used asmeasures of manufacturing performance criteria

First how the manufacturing performance will bea ected by the design parameters is analysed for settingthe total number of production seats and the design par-ameters for setting macrexible production seats in whicheither MTS products or MTO products can be assignedSecond the relationship between these parameters isclarireged which controls both the unreglled rate for MTSproducts and the ratio of delivery date achievementwithin their acceptable levels

2 Production model for production seat bookingsystem

21 Market demand and production seat

The product range consists of a single standard MTSproduct which is made based on a forecast of the marketdemand and diverse MTO products which are producedaccording to individual customersrsquo requirementsDemand for MTS products and orders for MTO prod-ucts arrive at random in each given period indepen-dently The production process is a single-stageproduction system Individual MTO products havemutually di erent processing times because they haveindividual speciregcations

22 Procedure for production seat booking system

The production seat booking system is in a hierarch-ical fashion composed of master scheduling setting of thetotal number of production seats which includes setting amacrexible production seat assigning MTS and MTO prod-ucts to the production seat and order release into theproduction process as shown in table 1

(1) Master scheduleIn the master scheduling the production capacity in

week w is determined at the end of week w iexcl 2 on thebasis of forecasting the demand for MTS back orderswhich have not been completed for processing forMTO products at the end of week w iexcl 2 and the antici-pated incoming orders for MTO products The produc-tion capacity required Xw in week w is determined asfollows

Xw ˆ Rsw Dagger Zo

wiexcl2 Dagger Row 0 micro micro 1 hellip1dagger

Production seat booking system 395

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where Rsw is the required production capacities for the

MTS product which is determined on the basis of fore-casting demand in week w DDw the inventory level at theend of week w iexcl 1 Iwiexcl1 and the safety inventory level SIfor MTS product as follows

Rsw ˆ DDw Dagger SI iexcl Iwiexcl1 hellip2dagger

Zowiexcl2 is production capacities for processing time for

backlog of MTO products Row is the required produc-

tion capacity which is composed of anticipated incomingorders for MTO products Ro

w and a design parameter A part of MTO products can be loaded by setting the value A long idle time in the production process oftenoccurs and retention of excessive MTS product stockwould be unavoidable if the production capacity wereset based on the anticipation of all incoming ordersfor MTO products ie when ˆ 1 Unfortunatelythe manufacturing time would be lengthened becauseof insu cient production capacity if the productioncapacity for anticipation of incoming orders forMTO products is not taken into account at allwhen ˆ 0

Thus the design parameter acts as a determinant toset the total number of production seats for one week aswell as to alleviate these conmacricting situations The pro-duction capacity at week w is determined at the end ofweek w iexcl 2 in order to assign orders with delivery date inweek w which will arrive during week w iexcl 1

The production capacity Xw for one week is dividedinto daily portions so that daily production capacities areequal

Yt ˆ Xw=L hellip3dagger

where Yt is the daily production capacity that is thetotal number of production seats and L is the numberof days in the week which is set as regve in this studyImplementation of this procedure leads to smooth pro-duction throughout the week

(2) Setting production seatsThe production seat is set based on the master

schedule as shown in reggure 1Using the parameter the daily production seat at

week w for MTO products is set as follows

SEot ˆ hellipRo

w Dagger Zowiexcl2dagger=L hellip4dagger

where SEot is the production seat for MTO products on

day tThe daily production seat for the MTS product is set

by subtracting the production seat for MTO productsfrom the daily total number of production seats asfollows

SEst ˆ Yt iexcl SEo

t hellip5dagger(3) Setting a macrexible production seat

Using the parameter plusmn a part of the production seatfor the MTS product set to the macrexible seat can bechangeable to the production seat for MTO productswhen there is no production seat available to assignincoming orders for MTO products because all produc-tion seats have already been occupied The MTS productis assigned to a macrexible seat when there is a vacant seat forMTO products

Ft ˆ plusmn SEst hellip0 micro plusmn micro 1dagger hellip6dagger

where plusmn is the macrexible production seat on day t

(4) Assigning orders to the production seatThe basic assignment rule for assigning orders to the

production process is regrst come regrst assigned Howeverorders for MTO products are given a higher priority forusing the macrexible production seat over MTS productsbecause the MTS product has a bu er inventory toabsorb macructuations in market demand

(a) Assigning MTO productsIncoming orders for MTO products are regrst assigned

to the production seat for MTO products to meet the

396 H Tsubone and Y Kobayashi

Table 1 Overview of hierarchical production planning system

Types of planning Purpose of planning

Master schedule Determination of production capacityfor week w

Setting production seat Setting individual production seat forMTO and MTS products

Setting macrexible seat Setting macrexible production seats forMTS product to be changeable seatfor MTO products

Order assignment Assigning MTS and MTO productsto the production seats

Order releasing Order release of MTS and MTOproducts received into the productionprocess

Production seat for MTO products

nnn

nnnnnn

nnn

week w

t-L

week w-1week w-2

t-L+1 2

Production seat for MTS products

Production seat used up for MTO products

Production seat used up for MTS products

Production seat available for MTO products

Production seats for MTO products which have already been assigned

Production seats for MTS products availabl

Figure 1 Examples for setting production seat

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desired delivery date If there is no production seat avail-able because all the production seats for MTO productshave already been occupied the order is assigned to themacrexible production seat on the same day If the macrexibleproduction seat is also occupied by other orders theorder is assigned to the production seat prior to thedesired delivery day until the order can be assigned toany production seat However when the order cannot beassigned because all production seats for MTO productsand macrexible seat have already been occupied the order isassigned to the production seat for MTO productsbehind the delivery date (this means that there is noseat which can meet the customerrsquos desired deliverydate)

(b) Assigning MTS productsMTS products are allocated at the end of day t to

the production seat for MTS products on day t Dagger 1 andare also assigned to the macrexible seat on day t Dagger 1 when themacrexible seat is vacant

23 Manufacturing performance criteria

The following criteria are used to evaluate the manu-facturing performance in the simulation model

(1) Ratio of delivery date achievement not that is theratio of the number of orders that can be com-pleted for processing within their required deliverydates to the total number of orders

not ˆP

t deostP

t dethellip7dagger

where deost is the number of orders of MTO prod-

ucts which can be completed for processing within

their delivery dates and det is the total number oforders received

(2) Unreglled rate of market demand for MTS products

shy This is the inventory level for MTS products atthe end of day t dt is the market demand for MTSproducts on day t

shy ˆP

t maxhellipiexclI st 0daggerP

t dt

hellip8dagger

where It is the inventory level for MTS products at theend of day t and dt is the forecast demand for MTSproducts on day t

3 Numerical experiments and results

31 Purpose of the experiment

The purpose of the experiment is twofold The regrst is toanalyse how the manufacturing performance is a ectedby the design parameter for setting the total number ofproduction seats and the design parameter plusmn for setting amacrexible production seat under various factors and levelsThe second is to clarify through the results of these ana-lyses the relationship between these two design par-ameters which can control the ratio of delivery dateachievement for MTO products and the unreglled ratefor MTO products within their acceptable levels

32 Experimental conditions

Fluctuations in market demand for MTS products aregiven by a normally distributed random variable with amean of middotdd(unitday) and a coe cient of variance CVwhile the orders for MTO products arrive every dayaccording to a Poisson distribution with a mean ofmiddotparapara(unitday)

The unit processing time for MTO products is deter-mined using an Erlang distribution with a mean of 1 andphase of 10 while the unit processing time for MTSproducts is regxed at 1 The delivery date due to thecustomersrsquo requirements is generated from a uniformdistribution [3 5]

The variable frac12 is introduced for various experimentallevels That is frac12 is the ratio of the processing timerequired for MTO products to the total processing timerequired for both MTO and MTS products Thus byvarying the frac12 value from 0 to 1 the experiments can beconducted for various levels of combinations of MTSproducts and MTO products production systems Theforecast demand for MTS products and the anticipatedorders for MTO products were set to the expected valuesin the weekly planning Thus the standard deviation in

Production seat booking system 397

Processing time for MTO products arrived

Seat for MTO products

Seat for MT S products

Produc tion of MTO produc ts which cannot be assigned prior to their delivery da te

Occupied seat

Assigning prior to their delivery date

t+1 t+du t+du+1 t+du- 1

Flexible seat

1

234

3 2

Figure 2 Example for assigning MTO products (when MTOproducts cannot be assigned to the production seat for MTO

products)

Dow

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rary

] at

01

03 1

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the demand for MTS and MTO products is equivalent tothe standard deviation frac14(ˆ cvd) and a root of middotdd respect-ively Having the bu er inventory for MTS productsunder various levels the experiments were conducted sothat the unreglled rate of MTS products can be controlledwithin a given value The experiments were also con-ducted over a period of 500 weeks Data for the regrst100 periods were discarded when computing the averagevalue All values were obtained by averaging the data fora simulated period of 400 weeks

33 Experimental results

Figure 3 shows the relationship between the parameter

for setting the total number of production seats and theratio of delivery date achievement not under the conditionthat the unreglled rate of MTS products shy can be con-trolled within 001 The rate of delivery date achievement

not increases as the value increases since the productionseats for MTO products increase in proportion to the value The slight increase of the value increases theratio of delivery date achievement for MTO productswhen the ratio frac12 of the number of orders for MTO prod-ucts to the total number of orders for MTO and MTSproducts is small Figure 4 shows the relationshipbetween the design parameter plusmn for macrexible productionseat and the delivery date achievement not when the

value is set to 10 under the condition that the shy valuecan be controlled within 001 The due delivery dateincreases as the parameter for the macrexible seat plusmn increasesbecause the production seats available for MTO productsincrease Figure 5 shows the relationship between thedesign parameter for macrexible production seats and therequired bu er inventory for MTS products which can

398 H Tsubone and Y Kobayashi

Parameter for the setting the total number of productionseats

Rat

io o

f de

liver

y da

te a

chie

vem

ent

Figure 3 Relationship between the parameter for setting thetotal number of production seats and the ratio of delivery date

achievement not under the condition that the unreglled rate ofMTS products shy can be controlled within 001

Design parameter for flexible production seat

Rat

io o

f de

liver

y da

te a

chiv

emen

t

Figure 4 Relationship between design parameter plusmn for macrexibleproduction seat and delivery date achievement not when the

value is set to 10 under the condition that the shy value can becontrolled within 001

Design parameter for flexible production seat

Req

uire

d bu

ffer

inve

ntor

y fo

r M

TS

pro

duct

s

Figure 5 Relationship between the design parameter for macrex-ible production seat and the required bu er inventory for MTS

products which can control the unreglled-rate within 001

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control the unreglled-rate within 001 when the value isset to 05

As the plusmn value increases the bu er inventory levelincreases because the production seats for MTO productsincrease resulting in a decrease in the number of produc-tion seats available for MTS products Figure 6 shows therelationship between the bu er inventory level for MTSproducts and the delivery date achievement for MTOproducts while varying the design parameter for macrexibleproduction seats The achievement not for MTO productsis not a ected by the bu er inventory level for MTSproducts under the condition that the value is largeenough to satisfy high delivery date achievementHowever when the value is small the delivery dateachievement also increases as the bu er inventory levelfor MTS products increases

Figures 7 and 8 show the domain in which both thedelivery date achievement not for MTO products and theunreglled rate shy for MTS product can be maintainedwithin the acceptable limits The domain can be speciregedby two design parameters for setting the total number ofproduction seats and macrexible production seats if themanagement sets the desired delivery date and theunreglled-rate Figure 7 shows the domain indicated bydark shading in which the not value and shy value can bemaintained at more than 095 and less than 005 respect-ively varying the ratio of orders frac12 for MTO products tothe total orders for both MTO and MTS products underthe condition that the bu er inventory level SI for MTSproducts is regxed at 02 (mean demandweek) Similarlyreggure 8 shows the domain under the various bu er

Production seat booking system 399

Buffer inventory level for MT products

Del

iver

y da

te a

chie

vem

ent f

or M

TO

pro

duct

s

S

Figure 6 Relationship between the bu er inventory level forMTS products and delivery date achievement for MTO prod-ucts while varying design parameter for macrexible production seat

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

fle

xibl

e pr

oduc

tion

seat

Figure 7 Domain in which the not value and shy value can bemaintained at more than 095 and less than 005 respectivelyvarying raqtio frac12 of the number of orders for MTO products tothe total number of orders for both MTO and MTS productswhen the bu er inventory level Si for MTS products is regxed at

02

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

set

ting

fle

xibl

e pr

oduc

tion

sea

t

Figure 8 Domain indicated in dark shading in which the notvalue and shy value can be maintained at more than 095 and lessthan 005 respectively under the various bu er inventory levels

for MTS products when the frac12 value is regxed at 05

Dow

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] at

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inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

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Page 4: Production seat booking system for the combination of make-to-order and make-to-stock products

where Rsw is the required production capacities for the

MTS product which is determined on the basis of fore-casting demand in week w DDw the inventory level at theend of week w iexcl 1 Iwiexcl1 and the safety inventory level SIfor MTS product as follows

Rsw ˆ DDw Dagger SI iexcl Iwiexcl1 hellip2dagger

Zowiexcl2 is production capacities for processing time for

backlog of MTO products Row is the required produc-

tion capacity which is composed of anticipated incomingorders for MTO products Ro

w and a design parameter A part of MTO products can be loaded by setting the value A long idle time in the production process oftenoccurs and retention of excessive MTS product stockwould be unavoidable if the production capacity wereset based on the anticipation of all incoming ordersfor MTO products ie when ˆ 1 Unfortunatelythe manufacturing time would be lengthened becauseof insu cient production capacity if the productioncapacity for anticipation of incoming orders forMTO products is not taken into account at allwhen ˆ 0

Thus the design parameter acts as a determinant toset the total number of production seats for one week aswell as to alleviate these conmacricting situations The pro-duction capacity at week w is determined at the end ofweek w iexcl 2 in order to assign orders with delivery date inweek w which will arrive during week w iexcl 1

The production capacity Xw for one week is dividedinto daily portions so that daily production capacities areequal

Yt ˆ Xw=L hellip3dagger

where Yt is the daily production capacity that is thetotal number of production seats and L is the numberof days in the week which is set as regve in this studyImplementation of this procedure leads to smooth pro-duction throughout the week

(2) Setting production seatsThe production seat is set based on the master

schedule as shown in reggure 1Using the parameter the daily production seat at

week w for MTO products is set as follows

SEot ˆ hellipRo

w Dagger Zowiexcl2dagger=L hellip4dagger

where SEot is the production seat for MTO products on

day tThe daily production seat for the MTS product is set

by subtracting the production seat for MTO productsfrom the daily total number of production seats asfollows

SEst ˆ Yt iexcl SEo

t hellip5dagger(3) Setting a macrexible production seat

Using the parameter plusmn a part of the production seatfor the MTS product set to the macrexible seat can bechangeable to the production seat for MTO productswhen there is no production seat available to assignincoming orders for MTO products because all produc-tion seats have already been occupied The MTS productis assigned to a macrexible seat when there is a vacant seat forMTO products

Ft ˆ plusmn SEst hellip0 micro plusmn micro 1dagger hellip6dagger

where plusmn is the macrexible production seat on day t

(4) Assigning orders to the production seatThe basic assignment rule for assigning orders to the

production process is regrst come regrst assigned Howeverorders for MTO products are given a higher priority forusing the macrexible production seat over MTS productsbecause the MTS product has a bu er inventory toabsorb macructuations in market demand

(a) Assigning MTO productsIncoming orders for MTO products are regrst assigned

to the production seat for MTO products to meet the

396 H Tsubone and Y Kobayashi

Table 1 Overview of hierarchical production planning system

Types of planning Purpose of planning

Master schedule Determination of production capacityfor week w

Setting production seat Setting individual production seat forMTO and MTS products

Setting macrexible seat Setting macrexible production seats forMTS product to be changeable seatfor MTO products

Order assignment Assigning MTS and MTO productsto the production seats

Order releasing Order release of MTS and MTOproducts received into the productionprocess

Production seat for MTO products

nnn

nnnnnn

nnn

week w

t-L

week w-1week w-2

t-L+1 2

Production seat for MTS products

Production seat used up for MTO products

Production seat used up for MTS products

Production seat available for MTO products

Production seats for MTO products which have already been assigned

Production seats for MTS products availabl

Figure 1 Examples for setting production seat

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desired delivery date If there is no production seat avail-able because all the production seats for MTO productshave already been occupied the order is assigned to themacrexible production seat on the same day If the macrexibleproduction seat is also occupied by other orders theorder is assigned to the production seat prior to thedesired delivery day until the order can be assigned toany production seat However when the order cannot beassigned because all production seats for MTO productsand macrexible seat have already been occupied the order isassigned to the production seat for MTO productsbehind the delivery date (this means that there is noseat which can meet the customerrsquos desired deliverydate)

(b) Assigning MTS productsMTS products are allocated at the end of day t to

the production seat for MTS products on day t Dagger 1 andare also assigned to the macrexible seat on day t Dagger 1 when themacrexible seat is vacant

23 Manufacturing performance criteria

The following criteria are used to evaluate the manu-facturing performance in the simulation model

(1) Ratio of delivery date achievement not that is theratio of the number of orders that can be com-pleted for processing within their required deliverydates to the total number of orders

not ˆP

t deostP

t dethellip7dagger

where deost is the number of orders of MTO prod-

ucts which can be completed for processing within

their delivery dates and det is the total number oforders received

(2) Unreglled rate of market demand for MTS products

shy This is the inventory level for MTS products atthe end of day t dt is the market demand for MTSproducts on day t

shy ˆP

t maxhellipiexclI st 0daggerP

t dt

hellip8dagger

where It is the inventory level for MTS products at theend of day t and dt is the forecast demand for MTSproducts on day t

3 Numerical experiments and results

31 Purpose of the experiment

The purpose of the experiment is twofold The regrst is toanalyse how the manufacturing performance is a ectedby the design parameter for setting the total number ofproduction seats and the design parameter plusmn for setting amacrexible production seat under various factors and levelsThe second is to clarify through the results of these ana-lyses the relationship between these two design par-ameters which can control the ratio of delivery dateachievement for MTO products and the unreglled ratefor MTO products within their acceptable levels

32 Experimental conditions

Fluctuations in market demand for MTS products aregiven by a normally distributed random variable with amean of middotdd(unitday) and a coe cient of variance CVwhile the orders for MTO products arrive every dayaccording to a Poisson distribution with a mean ofmiddotparapara(unitday)

The unit processing time for MTO products is deter-mined using an Erlang distribution with a mean of 1 andphase of 10 while the unit processing time for MTSproducts is regxed at 1 The delivery date due to thecustomersrsquo requirements is generated from a uniformdistribution [3 5]

The variable frac12 is introduced for various experimentallevels That is frac12 is the ratio of the processing timerequired for MTO products to the total processing timerequired for both MTO and MTS products Thus byvarying the frac12 value from 0 to 1 the experiments can beconducted for various levels of combinations of MTSproducts and MTO products production systems Theforecast demand for MTS products and the anticipatedorders for MTO products were set to the expected valuesin the weekly planning Thus the standard deviation in

Production seat booking system 397

Processing time for MTO products arrived

Seat for MTO products

Seat for MT S products

Produc tion of MTO produc ts which cannot be assigned prior to their delivery da te

Occupied seat

Assigning prior to their delivery date

t+1 t+du t+du+1 t+du- 1

Flexible seat

1

234

3 2

Figure 2 Example for assigning MTO products (when MTOproducts cannot be assigned to the production seat for MTO

products)

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

the demand for MTS and MTO products is equivalent tothe standard deviation frac14(ˆ cvd) and a root of middotdd respect-ively Having the bu er inventory for MTS productsunder various levels the experiments were conducted sothat the unreglled rate of MTS products can be controlledwithin a given value The experiments were also con-ducted over a period of 500 weeks Data for the regrst100 periods were discarded when computing the averagevalue All values were obtained by averaging the data fora simulated period of 400 weeks

33 Experimental results

Figure 3 shows the relationship between the parameter

for setting the total number of production seats and theratio of delivery date achievement not under the conditionthat the unreglled rate of MTS products shy can be con-trolled within 001 The rate of delivery date achievement

not increases as the value increases since the productionseats for MTO products increase in proportion to the value The slight increase of the value increases theratio of delivery date achievement for MTO productswhen the ratio frac12 of the number of orders for MTO prod-ucts to the total number of orders for MTO and MTSproducts is small Figure 4 shows the relationshipbetween the design parameter plusmn for macrexible productionseat and the delivery date achievement not when the

value is set to 10 under the condition that the shy valuecan be controlled within 001 The due delivery dateincreases as the parameter for the macrexible seat plusmn increasesbecause the production seats available for MTO productsincrease Figure 5 shows the relationship between thedesign parameter for macrexible production seats and therequired bu er inventory for MTS products which can

398 H Tsubone and Y Kobayashi

Parameter for the setting the total number of productionseats

Rat

io o

f de

liver

y da

te a

chie

vem

ent

Figure 3 Relationship between the parameter for setting thetotal number of production seats and the ratio of delivery date

achievement not under the condition that the unreglled rate ofMTS products shy can be controlled within 001

Design parameter for flexible production seat

Rat

io o

f de

liver

y da

te a

chiv

emen

t

Figure 4 Relationship between design parameter plusmn for macrexibleproduction seat and delivery date achievement not when the

value is set to 10 under the condition that the shy value can becontrolled within 001

Design parameter for flexible production seat

Req

uire

d bu

ffer

inve

ntor

y fo

r M

TS

pro

duct

s

Figure 5 Relationship between the design parameter for macrex-ible production seat and the required bu er inventory for MTS

products which can control the unreglled-rate within 001

Dow

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ded

by [

UQ

Lib

rary

] at

01

03 1

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control the unreglled-rate within 001 when the value isset to 05

As the plusmn value increases the bu er inventory levelincreases because the production seats for MTO productsincrease resulting in a decrease in the number of produc-tion seats available for MTS products Figure 6 shows therelationship between the bu er inventory level for MTSproducts and the delivery date achievement for MTOproducts while varying the design parameter for macrexibleproduction seats The achievement not for MTO productsis not a ected by the bu er inventory level for MTSproducts under the condition that the value is largeenough to satisfy high delivery date achievementHowever when the value is small the delivery dateachievement also increases as the bu er inventory levelfor MTS products increases

Figures 7 and 8 show the domain in which both thedelivery date achievement not for MTO products and theunreglled rate shy for MTS product can be maintainedwithin the acceptable limits The domain can be speciregedby two design parameters for setting the total number ofproduction seats and macrexible production seats if themanagement sets the desired delivery date and theunreglled-rate Figure 7 shows the domain indicated bydark shading in which the not value and shy value can bemaintained at more than 095 and less than 005 respect-ively varying the ratio of orders frac12 for MTO products tothe total orders for both MTO and MTS products underthe condition that the bu er inventory level SI for MTSproducts is regxed at 02 (mean demandweek) Similarlyreggure 8 shows the domain under the various bu er

Production seat booking system 399

Buffer inventory level for MT products

Del

iver

y da

te a

chie

vem

ent f

or M

TO

pro

duct

s

S

Figure 6 Relationship between the bu er inventory level forMTS products and delivery date achievement for MTO prod-ucts while varying design parameter for macrexible production seat

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

fle

xibl

e pr

oduc

tion

seat

Figure 7 Domain in which the not value and shy value can bemaintained at more than 095 and less than 005 respectivelyvarying raqtio frac12 of the number of orders for MTO products tothe total number of orders for both MTO and MTS productswhen the bu er inventory level Si for MTS products is regxed at

02

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

set

ting

fle

xibl

e pr

oduc

tion

sea

t

Figure 8 Domain indicated in dark shading in which the notvalue and shy value can be maintained at more than 095 and lessthan 005 respectively under the various bu er inventory levels

for MTS products when the frac12 value is regxed at 05

Dow

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ded

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] at

01

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inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

Page 5: Production seat booking system for the combination of make-to-order and make-to-stock products

desired delivery date If there is no production seat avail-able because all the production seats for MTO productshave already been occupied the order is assigned to themacrexible production seat on the same day If the macrexibleproduction seat is also occupied by other orders theorder is assigned to the production seat prior to thedesired delivery day until the order can be assigned toany production seat However when the order cannot beassigned because all production seats for MTO productsand macrexible seat have already been occupied the order isassigned to the production seat for MTO productsbehind the delivery date (this means that there is noseat which can meet the customerrsquos desired deliverydate)

(b) Assigning MTS productsMTS products are allocated at the end of day t to

the production seat for MTS products on day t Dagger 1 andare also assigned to the macrexible seat on day t Dagger 1 when themacrexible seat is vacant

23 Manufacturing performance criteria

The following criteria are used to evaluate the manu-facturing performance in the simulation model

(1) Ratio of delivery date achievement not that is theratio of the number of orders that can be com-pleted for processing within their required deliverydates to the total number of orders

not ˆP

t deostP

t dethellip7dagger

where deost is the number of orders of MTO prod-

ucts which can be completed for processing within

their delivery dates and det is the total number oforders received

(2) Unreglled rate of market demand for MTS products

shy This is the inventory level for MTS products atthe end of day t dt is the market demand for MTSproducts on day t

shy ˆP

t maxhellipiexclI st 0daggerP

t dt

hellip8dagger

where It is the inventory level for MTS products at theend of day t and dt is the forecast demand for MTSproducts on day t

3 Numerical experiments and results

31 Purpose of the experiment

The purpose of the experiment is twofold The regrst is toanalyse how the manufacturing performance is a ectedby the design parameter for setting the total number ofproduction seats and the design parameter plusmn for setting amacrexible production seat under various factors and levelsThe second is to clarify through the results of these ana-lyses the relationship between these two design par-ameters which can control the ratio of delivery dateachievement for MTO products and the unreglled ratefor MTO products within their acceptable levels

32 Experimental conditions

Fluctuations in market demand for MTS products aregiven by a normally distributed random variable with amean of middotdd(unitday) and a coe cient of variance CVwhile the orders for MTO products arrive every dayaccording to a Poisson distribution with a mean ofmiddotparapara(unitday)

The unit processing time for MTO products is deter-mined using an Erlang distribution with a mean of 1 andphase of 10 while the unit processing time for MTSproducts is regxed at 1 The delivery date due to thecustomersrsquo requirements is generated from a uniformdistribution [3 5]

The variable frac12 is introduced for various experimentallevels That is frac12 is the ratio of the processing timerequired for MTO products to the total processing timerequired for both MTO and MTS products Thus byvarying the frac12 value from 0 to 1 the experiments can beconducted for various levels of combinations of MTSproducts and MTO products production systems Theforecast demand for MTS products and the anticipatedorders for MTO products were set to the expected valuesin the weekly planning Thus the standard deviation in

Production seat booking system 397

Processing time for MTO products arrived

Seat for MTO products

Seat for MT S products

Produc tion of MTO produc ts which cannot be assigned prior to their delivery da te

Occupied seat

Assigning prior to their delivery date

t+1 t+du t+du+1 t+du- 1

Flexible seat

1

234

3 2

Figure 2 Example for assigning MTO products (when MTOproducts cannot be assigned to the production seat for MTO

products)

Dow

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ded

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Lib

rary

] at

01

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the demand for MTS and MTO products is equivalent tothe standard deviation frac14(ˆ cvd) and a root of middotdd respect-ively Having the bu er inventory for MTS productsunder various levels the experiments were conducted sothat the unreglled rate of MTS products can be controlledwithin a given value The experiments were also con-ducted over a period of 500 weeks Data for the regrst100 periods were discarded when computing the averagevalue All values were obtained by averaging the data fora simulated period of 400 weeks

33 Experimental results

Figure 3 shows the relationship between the parameter

for setting the total number of production seats and theratio of delivery date achievement not under the conditionthat the unreglled rate of MTS products shy can be con-trolled within 001 The rate of delivery date achievement

not increases as the value increases since the productionseats for MTO products increase in proportion to the value The slight increase of the value increases theratio of delivery date achievement for MTO productswhen the ratio frac12 of the number of orders for MTO prod-ucts to the total number of orders for MTO and MTSproducts is small Figure 4 shows the relationshipbetween the design parameter plusmn for macrexible productionseat and the delivery date achievement not when the

value is set to 10 under the condition that the shy valuecan be controlled within 001 The due delivery dateincreases as the parameter for the macrexible seat plusmn increasesbecause the production seats available for MTO productsincrease Figure 5 shows the relationship between thedesign parameter for macrexible production seats and therequired bu er inventory for MTS products which can

398 H Tsubone and Y Kobayashi

Parameter for the setting the total number of productionseats

Rat

io o

f de

liver

y da

te a

chie

vem

ent

Figure 3 Relationship between the parameter for setting thetotal number of production seats and the ratio of delivery date

achievement not under the condition that the unreglled rate ofMTS products shy can be controlled within 001

Design parameter for flexible production seat

Rat

io o

f de

liver

y da

te a

chiv

emen

t

Figure 4 Relationship between design parameter plusmn for macrexibleproduction seat and delivery date achievement not when the

value is set to 10 under the condition that the shy value can becontrolled within 001

Design parameter for flexible production seat

Req

uire

d bu

ffer

inve

ntor

y fo

r M

TS

pro

duct

s

Figure 5 Relationship between the design parameter for macrex-ible production seat and the required bu er inventory for MTS

products which can control the unreglled-rate within 001

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

control the unreglled-rate within 001 when the value isset to 05

As the plusmn value increases the bu er inventory levelincreases because the production seats for MTO productsincrease resulting in a decrease in the number of produc-tion seats available for MTS products Figure 6 shows therelationship between the bu er inventory level for MTSproducts and the delivery date achievement for MTOproducts while varying the design parameter for macrexibleproduction seats The achievement not for MTO productsis not a ected by the bu er inventory level for MTSproducts under the condition that the value is largeenough to satisfy high delivery date achievementHowever when the value is small the delivery dateachievement also increases as the bu er inventory levelfor MTS products increases

Figures 7 and 8 show the domain in which both thedelivery date achievement not for MTO products and theunreglled rate shy for MTS product can be maintainedwithin the acceptable limits The domain can be speciregedby two design parameters for setting the total number ofproduction seats and macrexible production seats if themanagement sets the desired delivery date and theunreglled-rate Figure 7 shows the domain indicated bydark shading in which the not value and shy value can bemaintained at more than 095 and less than 005 respect-ively varying the ratio of orders frac12 for MTO products tothe total orders for both MTO and MTS products underthe condition that the bu er inventory level SI for MTSproducts is regxed at 02 (mean demandweek) Similarlyreggure 8 shows the domain under the various bu er

Production seat booking system 399

Buffer inventory level for MT products

Del

iver

y da

te a

chie

vem

ent f

or M

TO

pro

duct

s

S

Figure 6 Relationship between the bu er inventory level forMTS products and delivery date achievement for MTO prod-ucts while varying design parameter for macrexible production seat

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

fle

xibl

e pr

oduc

tion

seat

Figure 7 Domain in which the not value and shy value can bemaintained at more than 095 and less than 005 respectivelyvarying raqtio frac12 of the number of orders for MTO products tothe total number of orders for both MTO and MTS productswhen the bu er inventory level Si for MTS products is regxed at

02

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

set

ting

fle

xibl

e pr

oduc

tion

sea

t

Figure 8 Domain indicated in dark shading in which the notvalue and shy value can be maintained at more than 095 and lessthan 005 respectively under the various bu er inventory levels

for MTS products when the frac12 value is regxed at 05

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

Page 6: Production seat booking system for the combination of make-to-order and make-to-stock products

the demand for MTS and MTO products is equivalent tothe standard deviation frac14(ˆ cvd) and a root of middotdd respect-ively Having the bu er inventory for MTS productsunder various levels the experiments were conducted sothat the unreglled rate of MTS products can be controlledwithin a given value The experiments were also con-ducted over a period of 500 weeks Data for the regrst100 periods were discarded when computing the averagevalue All values were obtained by averaging the data fora simulated period of 400 weeks

33 Experimental results

Figure 3 shows the relationship between the parameter

for setting the total number of production seats and theratio of delivery date achievement not under the conditionthat the unreglled rate of MTS products shy can be con-trolled within 001 The rate of delivery date achievement

not increases as the value increases since the productionseats for MTO products increase in proportion to the value The slight increase of the value increases theratio of delivery date achievement for MTO productswhen the ratio frac12 of the number of orders for MTO prod-ucts to the total number of orders for MTO and MTSproducts is small Figure 4 shows the relationshipbetween the design parameter plusmn for macrexible productionseat and the delivery date achievement not when the

value is set to 10 under the condition that the shy valuecan be controlled within 001 The due delivery dateincreases as the parameter for the macrexible seat plusmn increasesbecause the production seats available for MTO productsincrease Figure 5 shows the relationship between thedesign parameter for macrexible production seats and therequired bu er inventory for MTS products which can

398 H Tsubone and Y Kobayashi

Parameter for the setting the total number of productionseats

Rat

io o

f de

liver

y da

te a

chie

vem

ent

Figure 3 Relationship between the parameter for setting thetotal number of production seats and the ratio of delivery date

achievement not under the condition that the unreglled rate ofMTS products shy can be controlled within 001

Design parameter for flexible production seat

Rat

io o

f de

liver

y da

te a

chiv

emen

t

Figure 4 Relationship between design parameter plusmn for macrexibleproduction seat and delivery date achievement not when the

value is set to 10 under the condition that the shy value can becontrolled within 001

Design parameter for flexible production seat

Req

uire

d bu

ffer

inve

ntor

y fo

r M

TS

pro

duct

s

Figure 5 Relationship between the design parameter for macrex-ible production seat and the required bu er inventory for MTS

products which can control the unreglled-rate within 001

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

control the unreglled-rate within 001 when the value isset to 05

As the plusmn value increases the bu er inventory levelincreases because the production seats for MTO productsincrease resulting in a decrease in the number of produc-tion seats available for MTS products Figure 6 shows therelationship between the bu er inventory level for MTSproducts and the delivery date achievement for MTOproducts while varying the design parameter for macrexibleproduction seats The achievement not for MTO productsis not a ected by the bu er inventory level for MTSproducts under the condition that the value is largeenough to satisfy high delivery date achievementHowever when the value is small the delivery dateachievement also increases as the bu er inventory levelfor MTS products increases

Figures 7 and 8 show the domain in which both thedelivery date achievement not for MTO products and theunreglled rate shy for MTS product can be maintainedwithin the acceptable limits The domain can be speciregedby two design parameters for setting the total number ofproduction seats and macrexible production seats if themanagement sets the desired delivery date and theunreglled-rate Figure 7 shows the domain indicated bydark shading in which the not value and shy value can bemaintained at more than 095 and less than 005 respect-ively varying the ratio of orders frac12 for MTO products tothe total orders for both MTO and MTS products underthe condition that the bu er inventory level SI for MTSproducts is regxed at 02 (mean demandweek) Similarlyreggure 8 shows the domain under the various bu er

Production seat booking system 399

Buffer inventory level for MT products

Del

iver

y da

te a

chie

vem

ent f

or M

TO

pro

duct

s

S

Figure 6 Relationship between the bu er inventory level forMTS products and delivery date achievement for MTO prod-ucts while varying design parameter for macrexible production seat

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

fle

xibl

e pr

oduc

tion

seat

Figure 7 Domain in which the not value and shy value can bemaintained at more than 095 and less than 005 respectivelyvarying raqtio frac12 of the number of orders for MTO products tothe total number of orders for both MTO and MTS productswhen the bu er inventory level Si for MTS products is regxed at

02

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

set

ting

fle

xibl

e pr

oduc

tion

sea

t

Figure 8 Domain indicated in dark shading in which the notvalue and shy value can be maintained at more than 095 and lessthan 005 respectively under the various bu er inventory levels

for MTS products when the frac12 value is regxed at 05

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

Page 7: Production seat booking system for the combination of make-to-order and make-to-stock products

control the unreglled-rate within 001 when the value isset to 05

As the plusmn value increases the bu er inventory levelincreases because the production seats for MTO productsincrease resulting in a decrease in the number of produc-tion seats available for MTS products Figure 6 shows therelationship between the bu er inventory level for MTSproducts and the delivery date achievement for MTOproducts while varying the design parameter for macrexibleproduction seats The achievement not for MTO productsis not a ected by the bu er inventory level for MTSproducts under the condition that the value is largeenough to satisfy high delivery date achievementHowever when the value is small the delivery dateachievement also increases as the bu er inventory levelfor MTS products increases

Figures 7 and 8 show the domain in which both thedelivery date achievement not for MTO products and theunreglled rate shy for MTS product can be maintainedwithin the acceptable limits The domain can be speciregedby two design parameters for setting the total number ofproduction seats and macrexible production seats if themanagement sets the desired delivery date and theunreglled-rate Figure 7 shows the domain indicated bydark shading in which the not value and shy value can bemaintained at more than 095 and less than 005 respect-ively varying the ratio of orders frac12 for MTO products tothe total orders for both MTO and MTS products underthe condition that the bu er inventory level SI for MTSproducts is regxed at 02 (mean demandweek) Similarlyreggure 8 shows the domain under the various bu er

Production seat booking system 399

Buffer inventory level for MT products

Del

iver

y da

te a

chie

vem

ent f

or M

TO

pro

duct

s

S

Figure 6 Relationship between the bu er inventory level forMTS products and delivery date achievement for MTO prod-ucts while varying design parameter for macrexible production seat

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

fle

xibl

e pr

oduc

tion

seat

Figure 7 Domain in which the not value and shy value can bemaintained at more than 095 and less than 005 respectivelyvarying raqtio frac12 of the number of orders for MTO products tothe total number of orders for both MTO and MTS productswhen the bu er inventory level Si for MTS products is regxed at

02

Design parameter for setting the total number ofproduction seats

Des

ign

para

met

er

for

set

ting

fle

xibl

e pr

oduc

tion

sea

t

Figure 8 Domain indicated in dark shading in which the notvalue and shy value can be maintained at more than 095 and lessthan 005 respectively under the various bu er inventory levels

for MTS products when the frac12 value is regxed at 05

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014

Page 8: Production seat booking system for the combination of make-to-order and make-to-stock products

inventory levels for MTS products when the frac12 value isregxed as the ratio of orders for MTO products increases Itis necessary to set the parameter for setting the totalnumber of production seats to a higher level ratherthan the parameter for the macrexible seat (reggure 7) Asthe bu er inventory level for MTS product increasesthe design parameter for setting the total number ofproduction seats can be decreased considerably but thee ect in the case of the macrexible seat is very small (reggure8)

34 Summary of experiment

From a series of experiments the following points wereobtained

(1) As the total number of production seats increasesthe performance of the delivery date achievementfor MTO products can be improved and the bu erinventory level for MTS products can bedecreased

(2) As the ratio of orders for MTO products to ordersboth for MTO and MTS products increases it isnecessary to keep the parameter for productionseats for MTO products at a higher level so thatthe performance of the delivery date achievementfor MTO products can be maintained at a higherlevel

(3) There is a domain specireged by these parametersin which both the delivery date achievement forMTO products and the unreglled rate for MTSproducts can be maintained within the acceptablelimits Thus if the management sets the desiredperformance values the design parameter valueswhich satisfy the management requirements canbe determined

4 Conclusion

This paper clarireges how the parameter for settingproduction seats for MTS and MTO products and theparameter for macrexible seats would a ect achievement ofthe delivery date for MTO products and the unreglled ratefor MTS products as the manufacturing performance cri-teria in the manufacturing environment for a productionsystem of a combination of MTO and MTS products

This study analysed the parameters values which cankeep achievement of the delivery date for MTO productsat an acceptable level and can control the unreglled ratefor MTS products within acceptable levels As a result ofthe experiment it was clarireged that the increase in thenumber of production seats can improve the manufactur-ing performance simultaneously but macrexible productionseats increase the bu er inventory level required thoughit improves achievement of the delivery date Increasingthe number of production seats means increasing thebu er capacity for processing orders of MTO productswhich arrive

Thus using the experiment results management canmake the necessary decisions for setting the total numberof production seats and the macrexible seats if they canestimate the costs for keeping the bu er inventory levelfor MTS products and the costs for the bu er capacityThe production seat booking system can be e cient inthe manufacturing environment where the demand forthe MTS product is high considerably in comparisonwith the MTO products or the production seat for theMTS product can be changeable easily to the productionseat for the MTO products

References

Akuzawa T 1994 The booking system for the production ofcomputer Management Systems (Japanese) 4 14plusmn19

Hendry L 1992 COPP a decision support system for mana-ging customer enquiries International Journal of Operations ampProduction Management 12 53plusmn64

Matoba H Onari H and Enomoto M 1994 Productionplanning system for production seat booking managementsystems Management Systems (Japanese) 4 25plusmn30

Ohba M Uetake T and Tsubone H 2000 Logistics inno-vation in the reglm manufacturing industry The InternationalJournal of Manufacturing Technology Management 2 121plusmn126

Tamura T Fujita S and Kuga T 1997 The concept andpractice of the production seat system Managerial and DecisionEconomics 18 101plusmn112

Tsubone H Matsuura H and Kanda M 1992Interactive due date management system OMEGAInternational Journal of Management Science 20 89plusmn98

Udo G 1993 An investigation of due-date assignment usingworkload information of a dynamic shop International Journalof Economics 29 89plusmn101

Vivers F 1983 A decision support system for job shop sched-uling European Journal of Operational Research 14 95plusmn103

Week J 1979 A simulation study of predictable due datesManagement Science 25 363plusmn373

400 H Tsubone and Y Kobayashi

Dow

nloa

ded

by [

UQ

Lib

rary

] at

01

03 1

1 N

ovem

ber

2014