Upon receiving emergency orders, managers often expedite the orders when inventories are insufficient to fulfil orders from current stocks. These practices not only disrupt production flow on the shop floor, but also complicate capacity planning because of unexpected set-ups. While the use of safety stock is a clear option that can be used to overcome the impact of emergency orders, the effectiveness of the option needs to be examined. We compare the performance of push and pull systems with explicit consideration of order-expediting and capacity constraints. Using service level, operating costs, and delivery time for late orders as relevant performance measures, we provide insights for managers who suffer from uncertain demand.
ASJC Scopus subject areas
- Strategy and Management
- Management Science and Operations Research
- Industrial and Manufacturing Engineering