Capacity Coordination under Demand Uncertainty in a Hybrid Make-‎To-Stock/Make-To-Order Environment: A System Dynamics ‎Approach

Hybrid Make-To-Stock (MTS)/ Make-To-Order (MTO) production systems have recently attracted practitioners and academicians in the field of operations management, since these systems benefit from both stock-based and order-driven strategies. In this paper, capacity coordination dynamics of a hybrid MTS/MTO production system is addressed whose continuous production line comprises three workstations. Also, product portfolio of the considered system includes three kinds of products; pure MTS, pure MTO, and hybrid MTS/MTO. In the developed model, system performance is explored and assessed in terms of system delivery lead time. To do so, three capacity coordination rules are studies; simple average of expected demands, weighted average of expected demands, and the dynamic mechanism upon the difference between target and actual delivery lead times. Moreover, effects of demand uncertainty are taken into account.