Approximate Analysis of Decentralized, Multi-Stage, Pull-Type Production/Inventory Systems

We consider a decentralized, pull-type manufacturing system with each stage having its own input and output stock keeping activities. Material handling between stages is carried out according to a fixed quantity, non-constant withdrawal cycle. We approximate the system behavior using a two-node decomposition approach, which decomposes the system into smaller subsystems. The analysis of two-node subsystems is achieved using a matrix-recursive approach due to phase-type modeling of certain random variables. Our solution algorithm resolved a major difficulty (due to batch transfers) in the analytical approach to study multi-stage manufacturing systems. We also discuss system behavior and suggest several rules-of-thumb to improve system performance.

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