Designing unpaced production lines to optimize throughput and work-in-process inventory

This article considers the optimal design of unpaced assembly lines. Two key decisions in designing an unpaced assembly line are the allocation of work to the stations and the allocation of buffer storage space between the stations. To the best of the author's knowledge, this is the first article to jointly optimize both the allocation of workload and the allocation of buffer spaces simultaneously when the objective is to maximize the revenue from throughput minus the cost of work-in-process inventory. Exact solutions are provided for small lines (three or four stations) with a fixed kind of processing time distribution (exponential or Erlang). Ten observations are made about the characteristics of the allocation of workload and buffer spaces. Heuristics are suggested for designing lines with more stations or different processing time distributions. A simulation study is done to test the observations and heuristics for longer lines and different processing time distributions (lognormal). Significant savings can be achieved by jointly optimizing both the workload and the buffer space allocations.