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Optimal production and inventory decisions under demand and production disruptions
journal contribution
posted on 2015-08-06, 00:00 authored by Xiaoling Xu, Haiyan Wang, Jennifer Shang, Wen-Chyuan ChiangUnanticipated events may take place and disrupt demand and/or production in a supply chain. Conditional on the type, magnitude and duration of disruptions, changes may be called to revise the original production plan. We analyse different disruption scenarios and propose optimal production–inventory models for products facing demand and production disruptions. To lower the cost, we optimise the production run time, purchasing times and order quantity for the manufacturer. Numerical experiments are conducted to examine the influences of disruption time and magnitude on optimal production and purchasing decisions.