Lead time minimization of a multi-product, single-processor system: A comparison of cyclic policies

The supply chain under consideration is a two-echelon system consisting of a retailer and a manufacturer. The N different products face stochastic demand at the retailer and are produced using a shared facility at the manufacturer. Production changeover involves setup time that is significantly higher than the processing time. A cyclic polling model with exhaustive limited service policy from the networking literature is applied to the supply chain problem and the service limit values are obtained to minimize the lead time. Mathematically the exhaustive service policy gives least value, but in practice we can set the service limit to values near the stability condition and obtain similar results. Other cyclic policies that take into consideration either the minimum lot size or the production quantity band or the idle time between cycles are also studied. These are tested for different values of plant utilization and a comparison is drawn through simulation. Limitations of the model are discussed and possible extensions identified.