Journal ArticleDOI
Models for optimal lead time reduction
Arthur V. Hill,Inder Khosla +1 more
TLDR
A conceptual framework within which the costs and benefits of lead time reduction can be compared is developed and Mathematical models for optimal lead times reduction are developed within this framework.Abstract:
Most inventory and production planning models in the academic literature treat lead times either as constants or random variables with known distributions outside of management control. However, a number of recent articles in the popular press have argued that reducing lead times is a dominant issue in manufacturing strategy. The benefits of reducing customer lead times that are frequently cited include increased customer demand, improved quality, reduced unit cost, lower carrying cost, shorter forecast horizon, less safety stock inventory, and better market position.
Although the costs of reducing lead times in the long term may be relatively insignificant compared with the benefits, in the short term these costs can have a significant impact on the profitability of a firm. This article develops a conceptual framework within which the costs and benefits of lead time reduction can be compared. Mathematical models for optimal lead time reduction are developed within this framework. The solutions to these models provide methods for calculating optimal lead times, which can be applied in practice. Sensitivity analysis of the optimal solutions provides insight into the structure of these solutions.read more
Citations
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Journal ArticleDOI
Price, delivery time guarantees and capacity selection
TL;DR: An optimization model is developed to determine the joint optimal selection of these three important decision variables, with an objective of maximizing the average net profit in service industries where demands are sensitive to both price and delivery time.
Journal ArticleDOI
Price and Time Competition for Service Delivery
TL;DR: A stylized model is developed to analyze the impact of using time guarantees on competition and suggests that the equilibrium price and time guarantee decisions in an oligopolistic market with identical firms behave in a similar fashion as the optimal solution in a monopolistic situation from a previous study.
Posted Content
Stochastics and Statistics Customer lead time management when both demand and price are lead time sensitive
Saibal Ray,Elizabeth M. Jewkes +1 more
TL;DR: In this paper, an operating system consisting of a firm and its customers is modeled, where the mean demand rate is a function of the guaranteed delivery time offered to the customers and of market price, where price itself is determined by the length of the delivery time.
Journal ArticleDOI
Customer lead time management when both demand and price are lead time sensitive
Saibal Ray,Elizabeth M. Jewkes +1 more
TL;DR: In this paper, an operating system consisting of a firm and its customers is modeled, where the mean demand rate is a function of the guaranteed delivery time offered to the customers and of market price, where price itself is determined by the length of the delivery time.
Journal ArticleDOI
Lead-time setting, capacity utilization, and pricing decisions under lead-time dependent demand
TL;DR: In this paper, the authors examine the lead-time setting, capacity utilization, and pricing decisions facing a firm serving customers that are sensitive to quoted lead-times and show that the capacity utilization should be lower when customers are more sensitive to lead times and the firm incurs higher congestion related costs and/or the penalty for lateness is higher.
References
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Book
Competing Against Time
George Stalk,Thomas M. Hout +1 more
TL;DR: In this paper, Isabel Der Millionenseller is described as "the schnellste Frau des 19. Jahrhunderts" and "the most influential woman in the world in 72 days".
Journal ArticleDOI
Lot Sizes, Lead Times and In-Process Inventories
TL;DR: This paper examines the relationships between lot sizes and lead times and their implications for lot sizing and work-in-process inventories, for batch manufacturing shops with queues.
Journal ArticleDOI
Investing in Reduced Setups in the EOQ Model
TL;DR: In this paper, a formal framework for reducing setup costs in manufacturing processes is presented. But the authors focus only on one aspect of the advantages of reducing setups, namely reduced inventory related operating costs and do not account for other advantages, such as improved quality control, flexibility, and increased effective capacity.
Journal ArticleDOI
Lotsizing in Multi-Item Multi- Machine Job Shops
TL;DR: In this article, the relationship between lot-sizing and shop performance is represented using a queueing network model which is then embedded in an optimization routine that searches for optimal lot sizes.
Journal ArticleDOI
From EOQ Towards ZI
TL;DR: In this paper, a parametric algorithm that calculates the benefit of set up cost reduction is provided, and a mathematical model of ZI concepts is presented to scrutinize their validity and sometimes invalidity.