Communications - Scientific Letters of the University of Zilina 2013, 15(1):54-61 | DOI: 10.26552/com.C.2013.1.54-61

Value of Stock Level Information and Impact on Manufacturers' Substitution Decisions

Nursen Tore1, Secil Savasaneril1, Yasemin Serin1
1 Department of Industrial Engineering, Middle East Technical University, Ankara, Turkey

In this work, we study the product substitution decisions of amanufacturer that produces multiple items. We first quantify the cost savings due to flexibility attained through substitution. Ideally, the manufacturer must use the stock level information when giving production, scheduling and substitution decisions. In practice however, such decisions are often given ignoring the available information. In this work, we also address the importance of using stock level information by quantifying its value. Results show that using stock level information is critical especially when taking production scheduling decisions.

Keywords: product substitution, production scheduling, value of information, stochastic control of queues

Published: March 31, 2013  Show citation

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Tore, N., Savasaneril, S., & Serin, Y. (2013). Value of Stock Level Information and Impact on Manufacturers' Substitution Decisions. Communications - Scientific Letters of the University of Zilina, 15(1), 54-61. doi: 10.26552/com.C.2013.1.54-61
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