Decision Sciences Journal
Volume 31, Number 4
Fall 2000
The Impact of Imperfect Processes on Production Run Times
Tonya Boone
School of Business, College of William and Mary, Williamsburg,
VA 23187-8795, email: tonya.boone@business.wm.edu
Ram Ganeshan
School of Business, College of William and Mary, Williamsburg,
VA 23187-8795, email: ram.ganeshan@business.wm.edu
Yuanming Guo
J. P. Morgan Chase & Co., Spring House, PA 19477, email:
jguo@advanta.com
J. Keith Ord
McDonough School of Business, Georgetown University, Washington,
DC, 20057, email: ordk@msb.edu
Abstract. This paper investigates the interaction between
the economics of production and imperfections in the production
process. Specifically, this paper is the first to devise a model
in an attempt to provide managers with guidelines to choose the
appropriate production run times to buffer against both the production
of defective items and stoppages occurring due to machine breakdowns.
In addition to providing several structural properties of the
model, we show that a manager will always incur a cost penalty
when (s)he uses the results of two oft-cited models—the
EMQ (Economic Order/Manufacturing Quantity) and the NR-E (No-Resumption,
Exponential machine breakdown)—to determine production run
times.
Subject Areas: Inventory Models, Logistics, and Probability
Models. |