| Summary: | When there are sequence-dependent changeovers on a shared resource in hybrid make-to-stock/make-to-order (MTS/MTO) environments in process industries, coordination mechanisms for mix flexibility optimisation are critical for minimising changeover penalties of time and cost. Through a case study, Markov decision process (MDP) is used to determine the optimal policy for scheduling production on a filling line. Simulations are performed to investigate the penalties incurred when sub-optimal policies are utilised to satisfy customers. The results show that while the optimal policy leads to the minimal penalty in terms of rewards, it does not allow for production of all MTS and MTO products to meet customer requirements due to internal and external uncertainty. Sub-optimal policies must also be employed. The results of the simulations point to scheduling actions that would lead to low, moderate and high penalties. The practical implications of this study indicate that practitioners can use the MDP to evaluate the impact of their scheduling decisions on performance metrics on a shared resource in hybrid MTS/MTO environments.
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