Document Type
Article
Publication Date
1-1-2022
Journal / Book Title
Uncertain Supply Chain Management
Abstract
This study presents a multiproduct fabrication cost-minimization model featuring external providers, commonality, rework, and postponement in the supply chain environment. Customers’ requirements simultaneously emphasize quality, variety, and fast response time in current markets. To satisfy customer needs, most manufacturers in various industries (e.g., clothing, household goods, automotive, etc.) plan their multiproduct fabrication by incorporating a postponement strategy, rework process, and an outsourcing option. Motivated by the viewpoints above, this study offers a decision support system to address customers’ external expectations while optimizing internal operating expenses and machine utilization. We propose a single-machine, two-stage delayed differentiation system under a rotation cycle policy. All needed common parts are made in stage one, and stage two fabricates different end products. An external provider is hired to supply partially needed common parts to shorten uptime. The defective items are inevitably produced in both stages. They are categorized and reworked to maintain the desired product quality. Finally, we derive an optimal cost-minimization rotation cycle for our model and use a numerical example to investigate the collective and individual influences of reworking, postponement, and outsourcing to external providers on the multiproduct fabrication problem. In summary, this study can offer an optimization solution for production planning in various modern industries.
DOI
10.5267/j.uscm.2022.1.003
MSU Digital Commons Citation
Sung, Peng Cheng; Lai, Chia Ming; Wang, Yunsen; and Chiu, Yuan Shyi P., "Minimization of multiproduct fabrication cost featuring rework, commonality, external provider, and postponement" (2022). Department of Accounting and Finance Faculty Scholarship and Creative Works. 166.
https://digitalcommons.montclair.edu/acctg-finance-facpubs/166
Rights
© 2022 by the authors; licensee Growing Science, Canada. This is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC-BY) license (http://creativecommons.org/licenses/by/4.0/).
Published Citation
Sung, P. C., Lai, C. M., Wang, Y., & Chiu, Y. S. P. (2022). Minimization of multiproduct fabrication cost featuring rework, commonality, external provider, and postponement. Uncertain Supply Chain Management, 10(2), 353-364. https://doi.org/10.5267/j.uscm.2022.1.003