Economic Analysis of Production Bottlenecks

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Authors
Lawrence, Stephen R.
Buss, Arnold H.
Subjects
Manufacturing
bottlenecks
capacity design
demand management
economic analysis
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Date of Issue
1995
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Abstract
The management of bottlenecks has become a central topic in the planning and control of production systems. In this paper, we critically analyze bottlenecks from an economic perspective. Using a queueing network model, we demonstrate that bottlenecks are inevitable when there are differences in job arrival rates, processing rates, or costs of productive resources. These differences naturally lead to the creation of bottlenecks both for facilities design and demand planning problems. To evaluate bottlenecks from an economic perspective, we develop the notion of an "economic bottleneck," which defines resources as bottlenecks based on economic, rather than physical, characteristics.
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Article
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https://hdl.handle.net/10945/45512
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Operations Research
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.
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