Performance effects of setup time reduction with and without decision variable re-optimization: a simulation-optimization study

Authors:
Chandandeep S. Grewal;Silvanus T. Enns;Paul Rogers;J. Ethan Brown;David T. Sturrock
Affiliations:
University of Calgary, Calgary, AB, Canada;University of Calgary, Calgary, AB, Canada;University of Calgary, Calgary, AB, Canada;University of Calgary, Calgary, AB, Canada;University of Calgary, Calgary, AB, Canada
Venue:
Winter Simulation Conference
Year:
2009

Citing 3
Cited 1

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Abstract

This study investigates the benefits of setup time reduction in a simple, capacity-constrained supply chain using reorder point replenishment. A discrete-event simulation model was developed and linked to an optimization engine for simulation-optimization experiments. Performance trade-off curves between total inventory and customer service levels were generated under different setup times. Comparisons were made with and without re-optimizing the reorder point and lot size decision variables after reducing setups. It was found that the benefits of setup reduction can be amplified with re-optimizing. Analysis of variance (ANOVA) was used to analyze the main and interaction effects. The behavior of the optimal decision variables under setup time reduction was also examined. Insights should provide guidance for industrial practitioners wishing to maximize the benefits of setup time reduction.