An adaptive product changeover policy for a capacitated two-product supply chain in a non-stationary demand environment

The present paper investigates the effectiveness, in terms of fill rate, of a new adaptive production control policy for a two-product, two-echelon (i.e. factory and retailer) supply chain subject to a non-stationary customer demand. To model the capacity constraints more realistically, the factory node consists of an unbuffered production line subject to failures, and non-negligible changeover times. To cope with the disruptive events, we propose a new production control strategy named Adaptive Hedging Corridor Policy. A simulation model based on discrete-time difference equations is developed, and a two-step experimental campaign is conducted to compare the proposed control policy with two well-known alternatives proposed in the literature. The analysis of the results demonstrates the effectiveness of the new adaptive strategy in maximising the fill rate of supply chains subject to a non-stationary demand.

Automated summary

This paper investigates the effectiveness of a new adaptive production control policy for a two-product, two-echelon supply chain with non-stationary customer demand. The proposed strategy, named Adaptive Hedging Corridor Policy, aims to maximize the fill rate by considering capacity constraints and disruptive events. A simulation model and experimental campaign are conducted to compare the proposed strategy with two alternatives. The results demonstrate the effectiveness of the new adaptive strategy in maximizing fill rate under non-stationary demand.