In the food-processing industry, usually a limited number of storage tanks for intermediate storage is available, which are used for different products. The market sometimes requires extremely short lead times for some products, leading to prioritization of these products, partly through the dedication of a storage tank. This type of situation has hardly been investigated, although planners struggle with it in practice. This paper aims at investigating the fundamental effect of prioritization and dedicated storage in a two-stage production system, for various product mixes. We show the performance improvements for the prioritized product, as well as the negative effects for the other products. We also show how the effect decreases with more storage tanks, and increases with more products.
International Journal of Production Economics, 2007, Vol 108, Issue 1-2, p. 43-53