Sage Journals: Discover world-class research

Abstract

As manufacturing firms push to achieve shorter lead times and higher levels of customer service, the basic capability of underlying manufacturing processes must be reexamined. The capacity and operational variability of a process dictate a certain set of realistic performance goals. In this paper, we examine this fundamental relationship from an economic perspective using two levels of analysis. At the aggregate level, we model the manufacturing process as a single server queue and compare the traditional roles of marketing and manufacturing in setting performance and process design parameters. Insights gained at this level are incorporated into the analysis of a realistic multiserver, multistation manufacturing line. We develop an interaction decision tool to guide the selection of process and performance parameters in this more complex environment.

Keywords

CAPACITY ANALYSIS LEADTIME CUSTOMER SERVICE MARKETING‐MANUFACTURING INTERFACE

Get full access to this article

View all access options for this article.

References

Banker

Datar

Kekre

AND S.

(1988), “Relevant Costs, Congestion and Stochasticity in Production Environments,” Journal of Accounting and Economics, 10, 1, 171–197.

Bitran

and Tirupati

(1989), “Trade‐off Curves, Targeting and Balancing in Manufacturing Queueing Networks,” Operations Research, 37, 4, 547–564.

Blackburn

(1990), Time Based Competition, Richard D. Irwin, Homewood, IL.

Buss

Lawrence

, and Kropp

(1994), “Volume and Capacity Interaction in Facility Design,” IEE Transactions, 26, 4, 36–49.

Buzacott

and Shanthikumar

(1993), Stochastic Models of Manufacturing Systems, Prentice Hall, Englewood Cliffs, NJ.

Dallery

and Gershwin

(1992), “Manufacturing Flow Line Systems: A Review of Models and Analytical Results,” Queueing Systems, 12, 3–94.

Donohue

Hopp

, and Spearman

(1994), “Optimal Design of Stochastic Production Lines: A Dynamic Programming Approach,” Working Paper, Department of Operations and Information Management, University of Pennsylvania, Philadelphia, PA.

Elmaghraby

(1991), “Manufacturing Capacity and Its Measurement: A Critical Evaluation,” Computers in Operations Research, 18, 7, 615–627.

Henderson

and Quandt

(1980), Microeconomic Theory: A Mathematical Approach, 3rd ed., McGraw‐Hill, New York.

10.

Kleinrock

(1976), Queueing Systems, Vol. 2: Computer Applications. John Wiley and Sons, New York.

11.

Lawrence

and Buss

(1992), Economic Analysis of Production Bottlenecks, Technical Report, John W. Olin School of Business, Washington University, St. Louis, MO.

12.

Spearman

and Zazanis

(1992), “Push and Pull Production Systems: Issues and Comparisons,” Operations Research, 40, 3, 521–532.

13.

Stalk

and Hout

(1990), Competing Against Time, The Free Press, New York.

14.

Suri

and DeTreville

(1991), “Full Speed Ahead: A Look at Rapid Modeling Technology in Operations Management,” OR/MS Today, 18, 3, 34–42.

15.

Whitt

(1993), “Approximations for the GI/G/m Queue,” Production and Operations Management, 2, 2, 114–161.

THE ECONOMICS OF CAPACITY AND MARKETING MEASURES IN A SIMPLE MANUFACTURING ENVIRONMENT

Abstract

Keywords

Get full access to this article

References