PRODUCTION TO ORDER WITH RANDOM YIELDS - SINGLE-STAGE MULTIPLE LOT-SIZING

When production yields are random and orders need to be satisfied in f ull, several successive production runs may need to be initiated until an order is met. Variants of this multiple lot-sizing production to o rder problem have long been explored, but some natural fundamental gen eral questions have not been addressed. Also, the consequences of seve ral industrially relevant yield concepts, recently deployed in single lot-sizing models with random yields, have not yet been explored in th e multiple lot-sizing setting. Owing to the growing importance of prod uction to order of custom-made products, the multiple lot-sizing probl em is perhaps more important today than ever before. This paper highli ghts new fundamental problems in this area. The fundamental issues inc lude monotonicity of run size in setup cost and demand quantity. We al so provide a method for computing the costs' variance, so that risk/co st tradeoffs can be performed.