Design of Stockless Production Systems



In make-to-stock production systems finished goods are produced in anticipation of demand. By contrast, in stockless production systems finished goods are not produced until demand is observed. In this study we investigate the problem of designing a multi-item manufacturing system, where there is both demand- and production-related uncertainty, so that stockless operation will be optimal for all items. For the problem of interest, we focus on gaining an understanding of the effect of two design variables: (i) manufacturing speed—measured by the average manufacturing rate or, equivalently, the average unit manufacturing time, and (ii) manufacturing consistency—measured by the variation in unit manufacturing times. We establish conditions on these two variables that decision makers can use to design stockless production systems. Managerial implications of the conditions are also discussed.