Cost reduction through operations reversal

Ki Ling Cheung, Jing Sheng Song, Yue Zhang

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

In some manufacturing and service processes, several stages must be performed, but there is some freedom in the ordering of stages. Operations reversal means switching the order of two stages. Several authors have studied the benefits of operations reversal, focusing on the reduction of a certain variable's variance or a related measure. This paper focuses instead on cost. We construct a model with the standard objective of minimizing the long-run average inventory-related cost. First, by using stochastic orders, we identify conditions under which operations reversal reduces cost. We find that in some cases the variability and cost objectives agree on when operations reversal is beneficial, but in other cases they disagree. In particular, when demands are multinomially distributed, variability reduction may be accompanied by cost increase. We show that, to guarantee a lower cost, we need certain properties on the aggregated demand at the choice-level (such as demands for sweaters of the same color). Finally, we examine the effects of cost parameters and lead times on operations reversal under the cost measure.

Original languageEnglish (US)
Pages (from-to)100-112
Number of pages13
JournalEuropean Journal of Operational Research
Volume259
Issue number1
DOIs
StatePublished - May 16 2017

Fingerprint

Cost reduction
Reversal
Costs
Stochastic Order
Long-run
Manufacturing
Color

All Science Journal Classification (ASJC) codes

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

Cite this

Cheung, Ki Ling ; Song, Jing Sheng ; Zhang, Yue. / Cost reduction through operations reversal. In: European Journal of Operational Research. 2017 ; Vol. 259, No. 1. pp. 100-112.
@article{abf848457c124c42bc2ec93280c5e97b,
title = "Cost reduction through operations reversal",
abstract = "In some manufacturing and service processes, several stages must be performed, but there is some freedom in the ordering of stages. Operations reversal means switching the order of two stages. Several authors have studied the benefits of operations reversal, focusing on the reduction of a certain variable's variance or a related measure. This paper focuses instead on cost. We construct a model with the standard objective of minimizing the long-run average inventory-related cost. First, by using stochastic orders, we identify conditions under which operations reversal reduces cost. We find that in some cases the variability and cost objectives agree on when operations reversal is beneficial, but in other cases they disagree. In particular, when demands are multinomially distributed, variability reduction may be accompanied by cost increase. We show that, to guarantee a lower cost, we need certain properties on the aggregated demand at the choice-level (such as demands for sweaters of the same color). Finally, we examine the effects of cost parameters and lead times on operations reversal under the cost measure.",
author = "Cheung, {Ki Ling} and Song, {Jing Sheng} and Yue Zhang",
year = "2017",
month = "5",
day = "16",
doi = "10.1016/j.ejor.2016.09.052",
language = "English (US)",
volume = "259",
pages = "100--112",
journal = "European Journal of Operational Research",
issn = "0377-2217",
publisher = "Elsevier",
number = "1",

}

Cost reduction through operations reversal. / Cheung, Ki Ling; Song, Jing Sheng; Zhang, Yue.

In: European Journal of Operational Research, Vol. 259, No. 1, 16.05.2017, p. 100-112.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Cost reduction through operations reversal

AU - Cheung, Ki Ling

AU - Song, Jing Sheng

AU - Zhang, Yue

PY - 2017/5/16

Y1 - 2017/5/16

N2 - In some manufacturing and service processes, several stages must be performed, but there is some freedom in the ordering of stages. Operations reversal means switching the order of two stages. Several authors have studied the benefits of operations reversal, focusing on the reduction of a certain variable's variance or a related measure. This paper focuses instead on cost. We construct a model with the standard objective of minimizing the long-run average inventory-related cost. First, by using stochastic orders, we identify conditions under which operations reversal reduces cost. We find that in some cases the variability and cost objectives agree on when operations reversal is beneficial, but in other cases they disagree. In particular, when demands are multinomially distributed, variability reduction may be accompanied by cost increase. We show that, to guarantee a lower cost, we need certain properties on the aggregated demand at the choice-level (such as demands for sweaters of the same color). Finally, we examine the effects of cost parameters and lead times on operations reversal under the cost measure.

AB - In some manufacturing and service processes, several stages must be performed, but there is some freedom in the ordering of stages. Operations reversal means switching the order of two stages. Several authors have studied the benefits of operations reversal, focusing on the reduction of a certain variable's variance or a related measure. This paper focuses instead on cost. We construct a model with the standard objective of minimizing the long-run average inventory-related cost. First, by using stochastic orders, we identify conditions under which operations reversal reduces cost. We find that in some cases the variability and cost objectives agree on when operations reversal is beneficial, but in other cases they disagree. In particular, when demands are multinomially distributed, variability reduction may be accompanied by cost increase. We show that, to guarantee a lower cost, we need certain properties on the aggregated demand at the choice-level (such as demands for sweaters of the same color). Finally, we examine the effects of cost parameters and lead times on operations reversal under the cost measure.

UR - http://www.scopus.com/inward/record.url?scp=85005777532&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85005777532&partnerID=8YFLogxK

U2 - 10.1016/j.ejor.2016.09.052

DO - 10.1016/j.ejor.2016.09.052

M3 - Article

AN - SCOPUS:85005777532

VL - 259

SP - 100

EP - 112

JO - European Journal of Operational Research

JF - European Journal of Operational Research

SN - 0377-2217

IS - 1

ER -