Recent results in coordinated inventory, admission, and quality control of single part type manufacturing systems

This paper reviews some recent applications in joint management of sales, inventories, and product quality in manufacturing systems that produce a single product. We consider admission and production control policies of the threshold type whereby the system produces until stock reaches a certain level and accepts orders until its backlog reaches another critical level. The problem is to find the optimal quality tolerances and the critical stock and backlog levels which maximize the mean profit rate of the system. Theoretical and numerical results, verify that managing inventory levels, customer orders, and quality tolerances jointly achieves higher profit than independently determined control policies.