Quasi-fixed cyclic production schemes for multiple products with stochastic demand

In this paper we present an approach to generate cyclic production schemes for multiple products with stochastic demand to be produced on a single production unit. This scheme specifies a fixed and periodic production sequence, called a cycle, where each product may occur more than once in the sequence. In order to stabilize the cycle length alternative control strategies are introduced. These strategies keep the cycle length close to a target length by means of adding idle time to the cycle, cutting production short or overproduction. On basis of the selected control strategy as well as a base-stock policy target inventory levels are determined for each production run in the cycle. Demand can be backlogged but a certain service level is required. Setup times are sequence-dependent and the storage is capacitated. Employing the developed strategies we investigate the tradeoff between stability of cycle length and total cost induced by the production schedule in a computational study based on both, real world data and random test instances.