Integrated Tactical and Operational Models for Establishing Factory Rhythms

James A. Rappold

Assistant Professor

School of Business and the College of Engineering

University of Wisconsin-Madison

975 University Avenue

Madison, WI 53706

Keenan D. Yoho¹

Ph.D. Candidate

School of Business and the College of Engineering

University of Wisconsin-Madison

975 University Avenue

Madison, WI 53706

We construct a set of tactical and operational models for stabilizing production capacity in a multi-item, single echelon production and inventory system where demand is highly uncertain and setup times between items produced in a predetermined sequence is significant. We have observed these types of environments within process manufacturing firms in the paper, chemical and petroleum products industries. We introduce a computationally efficient solution approach for determining inventory levels for stabilizing production capacity and then a production policy that maintains short, predictable and repeatable cycles that satisfy uncertain demand and establish a factory rhythm. Our approach departs from inventory-centric approaches to multi-echelon problem-solving and points to new approaches to better capacity management in the “old economy.”

¹SCALE Dissertation Support Award Finalist

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