The impact of adding a make-to-order item to a make-to-stock production system

Stochastic Economic Lot Scheduling Problems (ELSPs) involve settings where several items need to be produced in a common facility with limited capacit y, under significant uncertainty regarding demands, unit production times, setup times, or combinations thereof. We consider systems where some produc ts are made-to-stock while another product line is made-to-order. We presen t a rich and effective class of strategies for which a variety of cost and performance measures can be evaluated and optimized efficiently by analytic al methods. These include inventory level and waiting-time distributions, a s well as average setup, holding, and backlogging costs. We also characteri ze how strategy choices are affected by the system parameters. The availabi lity of efficient analytical evaluation and optimization methods permits us to address the impact of product line diversification or standardization o n the performance of the manufacturing system, in particular the logistical implications of adding low-volume specialized models to a given make-to-st ock product line.