Models to optimize multi-stage linkages in manufacturing and distribution operations

A multi-stage system is a collection of separate and distinct stages, each with clearly definable resource and equipment inputs and with some measurable output, which is often some intermediate product or service. The multi-stage system integrates and coordinates the activities at each stage to produce a final end product or service to consumers. This dissertation focuses on mathematical decision models that support effective management of multi-stage systems in which some degree of flexibility exists between system stages. We present models of three specific kinds of multi-stage systems and use these models to generate insights for operations managers. Each of the three systems employs an optimization-based model to exploit some degree of flexibility between stage linkages. The first system considers a production planning decision for the production stages in discrete parts manufacturing. We consider a system in which the producer has the flexibility to substitute different input components in a variety of end-products. This model allows us to show the economic benefits of planning component substitutions at various production stages, even in the presence of substitution premiums. We next consider the production stages of a specialty steel sheet manufacturer. A system model considers linkages between a unique set of customer demand specifications and the continuous steel slab casting operation. The model demonstrates how the producer can capitalize on customer demand flexibility. Finally we consider a multi-stage system on a much larger scale: a retail distribution system. A retailer's inventory replenishment policy creates a linkage between the supplier and retailer stages in a retail distribution system. A system model demonstrates how both stages can benefit if the retailer allows flexibility in managing its stock replenishment. The models we consider identify new sources of production and distribution flexibility, provide novel solution approaches through mathematical models, and use the models and results to generate new insights for managing multi-stage systems. Each model achieves its goal of providing new mechanisms and systems a firm can utilize to improve operating efficiency. This work further identifies new areas open for future research that have promising potential to continue to improve the operations efficiency of organizations.