Developing cost-optimization production control model via simulation

This research is a further development of our recent papers [2,3]. A produc tion system produces a given target amount by a given due date and has seve ral possible speeds which are subject to random disturbances. The system's output can be measured only at present inspection (control) points. The ave rage manufacturing costs per time unit for each production speed and the av erage cost of performing a single inspection at the control point to observ e the actual output at that point, are given. The least permissible probabi lity of meeting the target on time, i.e. the system's chance constraint, is pre-given too. The problem is to determine both, control points and speeds to be introduced at those points, in order to minimize the system's expens es within the planning horizon. A stochastic optimization problem is formul ated, followed by a heuristic solution via simulation. A numerical example is given. Extensive experimentation has been undertaken to illustrate the e fficiency of the presented algorithm The algorithm has been used in practic e on a real man-machine plant. (C) 1999 IMACS/Elsevier Science B.V. All rig hts reserved.