Capacity-constrained production-inventory systems : modelling and analysis in both a traditional and an e-business context

Abstract: This thesis addresses issues in production-inventory systems in both a traditional and an e-business context, with an emphasis on capacity considerations. The general aim of the thesis is to model capacity-constrained production-inventory systems and thereby provide theoretical frameworks for control as well as design of these systems.The research has been conducted in two different contexts. In the traditional context, an extensive survey of the literature on capacity-constrained production-inventory systems is first presented. Production-inventory systems with capacity limitations are then modelled using the Laplace transform and input-output analysis for deterministic and stochastic demand situations, respectively. In the formulation of the model for the deterministic demand situations, the focus is on the way in which the fundamental balance equations for inventory and backlogs need to be modified. In the formulation for stochastic demand situations, the model extends previous theory in the direction of capacity considerations combined with uncertainty in external demand. The results of the modelling and analysis in the traditional context contribute to the development of a theoretical background for production-inventory system control applying the Laplace transform approach and input-output analysis.In the e-business context, those aspects which are affected by e-business based customer ordering systems, and hence influence production-inventory systems, are studied. A mathematical model based on the assumption of a simple e-business model of direct sales channels is presented. Since e-business significantly facilitates customisation, models of two different production systems which consider customisation are provided. The production-inventory systems are then developed into an extended system where customers are included. For this system, a multiple objective formulation is obtained, in view of the importance of customers. The results of the modelling and analysis in the ebusiness context contribute insights and perspectives on ways to design and control ebusiness influenced production - inventory systems.