Abstract
A queueing network model is developed for understanding the way product quality may affect the profitability of production systems, when the consumers base their future demand patterns on the quality of the products they have recently purchased. We examine a multistage make-to-order system which receives orders from regular and occasional customers, the former having a higher mean demand rate. Each outgoing item undergoes inspection and quality grading to decide whether it will be discarded as nonconforming or shipped to a customer. In the latter case, the customer who purchases the item will subsequently become a regular or occasional customer with complementary probabilities which depend on the quality level of that item. The solutions of simple test cases with dynamic programming show that the optimal policy is state-dependent, complex, and computationally intensive. A much simpler, threshold-type policy is proposed, whose performance evaluation and optimization uses closed queueing network formulas and has minimal computational requirements. Numerical results indicate that the proposed policy performs almost as well as the optimal policy.
Article PDF
Similar content being viewed by others
Explore related subjects
Discover the latest articles, news and stories from top researchers in related subjects.Avoid common mistakes on your manuscript.
References
Anderson EW, Fornell C, Lehmann DR (1994) Customer satisfaction, market share and profitability. J Mark 58(2):53–66. https://doi.org/10.2307/1252310
Oliver R (1997) Satisfaction: a behavioral perspective on the customer. McGraw-Hill, New York. https://doi.org/10.4324/9781315700892
Ittner CD, Larcker DF (1998) Are non-financial measures leading indicators of financial performance? An analysis of customer satisfaction. J Account Res 36:1–35. https://doi.org/10.2307/2491304
Fornell C, Wernerfelt B (1987) Defensive marketing strategy by customer complaint management: a theoritical analysis. J Mark Res 24:337–346. https://doi.org/10.2307/3151381
Fornell C, Wernerfelt B (1988) A model for customer complaint management. Mark Sci 7:271–286. https://doi.org/10.1287/mksc.7.3.287
Rust RT, Zahorik AJ (1993) Customer satisfaction, customer retention, and market share. J Retail 57(3):25–48. https://doi.org/10.1016/0022-4359(93)90003-2
Anderson EW, Sullivan M (1993) The antecedents and consequences of customer satisfaction for firms. Mark Sci 12(2):125–143. https://doi.org/10.1287/mksc.12.2.125
Grigoroudis E, Siskos Y (2010) Customer satisfaction evaluation: methods for measuring and implementing service quality. Springer, New York
Deng T, Shen Z-JM, Shanthikumar JG (2014) Statistical learning of service-dependent demand in a multiperiod newsvendor setting. Oper Res 62(5):1064–1076. https://doi.org/10.1287/opre.2014.1303
Liberopoulos G, Tsikis I, Kozanidis G (2005) Inventory control in a duopoly: a dynamic non-cooperative game-theoretic approach. Proc. 17th National Conference of the Hellenic Operational Research Society (HELORS 2005), Patras, Greece, June 16-18. http://www.mie.uth.gr/files/LibTsikKoz_17_EEEE_2005.pdf
Taguchi G, Elsayed E, Hsiang T (1989) Quality engineering in production systems. McGraw-Hill, New York
Yao DD, Zheng S (2002) Dynamic control of quality in production-inventory systems: coordination and optimization. Springer, New York. https://doi.org/10.1007/b98974
Kim J, Gershwin SB (2005) Integrated quality and quantity modeling of a production line. OR Spectr 27(2):287–314. https://doi.org/10.1007/s00291-005-0202-1
Gershwin SB, Schick I (2007) A taxonomy of quality/quantity issues in manufacturing systems. In: Proceedings of the 6th Conference on the Analysis of Manufacturing Systems, Lunteren, The Netherlands, 2007
Li J, Blumenfeld DE, Marin SP (2008) Production system design for quality robustness. IIE Trans 40(3):162–176. https://doi.org/10.1080/07408170601013661
Colledani M, Tolio T (2011) Integrated analysis of quality and production logistics performance in manufacturing lines. Int J Prod Res 49(2):485–518. https://doi.org/10.1080/00207540903443246
Inman RR, Blumenfeld DE, Huang N, Li J (2013) Survey of recent advances on the interface between production system design and quality. IIE Trans 45(6):557–574. https://doi.org/10.1080/0740817x.2012.757680
Tang K, Tang J (1994) Design of screening procedures: a review. J Qual Technol 26:209–226
Shin S, Kongsuwon P, Cho BR (2010) Development of the parametric tolerance modeling and optimization schemes and cost-effective solutions. Eur J Oper Res 207:1728–1741. https://doi.org/10.1016/j.ejor.2010.07.009
Kouikoglou VS, Phillis YA (2002) Design of product specifications and control policies in a single-stage production system. IIE Trans 34:590–600. https://doi.org/10.1080/07408170208928896
Ioannidis S, Kouikoglou VS, Phillis YA (2004) Coordinating quality, production and sales in manufacturing systems. Int J Prod Res 42(8):3947–3956. https://doi.org/10.1080/00207540410001696357
Hajji A, Mhada F, Gharbi A, Pellerin R, Malhame R (2011) Integrated product specifications and productivity decision making in unreliable manufacturing systems. Int J Prod Econ 129(1):32–42. https://doi.org/10.1016/j.ijpe.2010.08.008
Hajji A, Gharbi A, Pellerin A (2012) Joint production control and product quality decision making in a failure prone multiple-product manufacturing system. Int J Prod Res 50(13):3661–3672. https://doi.org/10.1080/00207543.2012.671588
Konstantas D, Grigoroudis E, Kouikoglou VS, Ioannidis S (2015) A simple model of the effects of quality on market share and profitability in single stage manufacturing systems. In: Proceedings of the 10th conference on stochastic models of manufacturing and service operations(SMMSO 2015), University of Thessaly Publications, June 2015, Volos, Greece, 95–102. http://media.wix.com/ugd/ea8d10_56378a1af9fe4618a3a7578ead7389f2.pdf
Lippman SA (1975) Applying a new device in the optimization of exponential queuing systems. Oper Res 23(4):687–710. https://doi.org/10.1287/opre.23.4.687
Puterman ML (1994) Markov decision processes: discrete stochastic dynamic programming. Wiley, New York
Buzen JP (1973) Computational algorithms for closed queueing networks with exponential servers. Commun ACM 16:527–531. https://doi.org/10.1145/362342.362345
Giannakis G, Kouikoglou VS, Nikitas S (2010) Workflow analysis of production lines with complete inspection and rework loops. Int J Prod Res 48(24):7321–7336. https://doi.org/10.1080/00207540903469050
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Konstantas, D., Ioannidis, S., Kouikoglou, V.S. et al. Linking product quality and customer behavior for performance analysis and optimization of make-to-order manufacturing systems. Int J Adv Manuf Technol 95, 587–596 (2018). https://doi.org/10.1007/s00170-017-1225-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00170-017-1225-x