Analytic models for when and how to expedite in make-to-order systems

Expediting is defined as using overtime or subcontracting to supplement reg ular production. This is usually done when the number of backorders has gro wn to be unacceptably large. In this paper, we consider analytic models for deciding when and how to expedite in a single-product make-to-order enviro nment. We derive the structure of the optimal expediting policy in both con tinuous- and discrete-time cases. The continuous-time model corresponds bes t to subcontracting and the discrete-time model corresponds to either overt ime or subcontracting. Models for performance analysis of the continuous-ti me case are also given.