OPTIMUM JUNCTION POINT LOCATION AND INVENTORY LEVELS IN SERIAL HYBRIDPUSH PULL PRODUCTION SYSTEMS/

The choice of a production philosophy by a manufacturing company is im portant. Costs for holding inventory and costs for missing due-dates o n customer orders are key components of overall profitability. In this paper, an optimization model of a new, yet simple, kind of horizontal ly integrated push/pull hybrid production system (HIHPS) is formulated that resolves the tradeoff between these two important cost component s. At optimum, it will suggest either an all-push, all-pull, or a mixe d operation configuration. A mixed system would be comprised of push s tations followed by a cache of semi-finished product (SFP), followed b y pull stations. An exact analytical solution of HIHPS is derived for the automated (low variability) case. A modification of the simulated annealing algorithm is presented to conduct the optimization search. R esults of a case study are used to demonstrate the methodology and val idate the model's predictions.