MULTISTAGE PRODUCTION SYSTEMS WITH RANDOM YIELD - HEURISTICS AND OPTIMALITY

Most previous work on adjusting lot-sizes to recognize yield losses ha s been restricted to single-stage production processes. Here we examin e multistage serial or linear production systems with yield loss. Afte r developing a dynamic program-ming optimization to be used as a bench mark, four single-stage, lot-sizing heuristics are adapted for use in the multistage system, and their performance over a 320-problem test b ed is compared with the optimization. Two heuristics based on marginal analysis are found to give close-to-optimal results.