Title: A comparative study of rough-cut cost estimations in a finite-capacity stochastic environment

Authors: Mark Eklin, Avraham Shtub, Yohanan Arzi

Addresses: Faculty of Industrial Engineering and Management, Technion – Israel Institute of Technology, Technion City, Haifa 32000, Israel. ' Faculty of Industrial Engineering and Management, Technion – Israel Institute of Technology, Technion City, Haifa 32000, Israel. ' Department of Industrial Engineering and Management, Ort Braude College, P.O. Box 78, Karmiel 21982, Israel

Abstract: In recent years, several researchers suggested cost estimation models that consider the limited capacity of the shop. In these studies, the stochastic nature of the shop floor is modelled by a time-consuming simulation. This article compares five alternative rough-cut cost estimation methods that can replace the simulation. The study compares the cost estimations derived from these methods. A cost estimation method, based on the forced idle time of the bottleneck workstation, was found to be outperform the others. As the best method, the bottleneck-based method was compared to the actual order|s cost and was found to be a replacement to simulation.

Keywords: aggregate planning; rough-cut cost estimation; finite capacity; job shop scheduling; revenue management; stochastic environment; forced idle time; bottleneck workstations.

DOI: 10.1504/IJRM.2009.023136

International Journal of Revenue Management, 2009 Vol.3 No.1, pp.1 - 36

Published online: 11 Feb 2009 *

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