A Flexible Service Rule for the Dynamic Make-to-Stock/Make-to-order Hybrid Production System

A dynamic MTS/MTO hybrid system combines make-to-stock (MTS) and make-to-order (MTO) operations with MTS dedicated machines and hybrid machines which can be switched between both operations flexibly. The two classes, priority and ordinary demands, and the demand increases by discounting the price of MTS product are assumed. For the dynamic MTS/MTO hybrid system, a flexible service rule with demand prioritization and pricing rules is proposed. The operating cost and the MTO queue length are evaluated by Markov analysis. The results of analysis showed that the system performance could be improved by the proposed rule.