OPTIMAL LEADTIMES PLANNING IN A SERIAL PRODUCTION SYSTEM

Consider an N stage serial production line where the processing times of orders may be random. Since the carrying costs increase from stage to stage, the standard production procedure, that is, to determine a t otal leadtime for the entire order by taking an appropriate percentile of the distribution of total processing time and then release the ord er immediately from stage to stage during the process, may not be opti mal since it ignores inventory carrying costs. This article studies a per stage planned leadtime dispatching policy for such systems. The or der will not be released immediately to the next workstation prior to a predetermined delivery time, or planned leadtime. The vector of plan ned leadtimes at workstations is to be determined by trading off expec ted holding costs at all stages and expected penalty costs for exceedi ng the total planned leadtime. We show that the optimal vector of plan ned leadtimes may be obtained efficiently by solving an equivalent ser ial inventory model of the type considered in Clark and Scarf (1960).