1 Department of Business Studies, Aarhus School of Business, Aarhus BSS, Aarhus University2 CORAL - Centre for Operations Research Applications in Logistics, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics and Business Economics, Aarhus BSS, Aarhus University4 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
In this paper we will discuss aspects of the computation of tail-probabilities by simulation in the context of a generic job/flow-shop model consisting of structural elements such as bottle-necks, re-entrance as well as a mixture of these two fundamental types of production complexity and all this embedded in a multi-part production set-up. Standard simulation methodology relies heavily on the Central Limit Theorem, but as powerful this statistical concept might be it has its pitfalls that as will be shown in this work it can be quite deceptive and consequently harmful. We will focus our discussion of the estimation of the probability of critically delayed delivery beyond a specified threshold value given a certain production batch size and try to establish a relation to certain parameters that can be linked to the degree of regularity of the arrival stream of parts to the job/flow-shop. This last aspect relates remotely to the Lean Thinking philosophy that praises the smooth and uninterrupted production flow to be beneficial to the overall operation of productive plants in general, and we will link our findings to this discussion as well.