Manufacturing and Distribution Strategies for Volatile and Cyclical Customer Demand – OSU02-01

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Manufacturing and Distribution Strategies for Volatile and Cyclical Customer Demand – OSU02-01

This project develops a manufacturing strategy and a production/inventory model that could help organizations with volatile and cyclical demand perform in a better and efficient manner.


Smith Tool

Research Team:

Rick Ingalls, Rajesh Velliyanallore, Sarah Root, Stephanie N. Garman

Universities Involved:

Oklahoma State University

Start Date:


End Date:



The objective of this project is to develop a business strategy model that optimizes resources during periods of volatile and cyclical demand and implement that model at the sponsor facility for on-going use by the company.
In this project, researchers from Oklahoma State University will partner with a sponsor to investigate and develop business management models that will develop manufacturing and distribution strategies in markets with volatile and cyclical customer demand. Business cycles in the sponsor’s industry have traditionally been long, and this long boom-bust cycle has allowed companies in the industry to fluctuate the use of key resources, such as direct labor and equipment, without incurring burdensome costs. However, the new business cycle for the industry has been shortened to approximately 6-9 months. The new cycle creates several issues that the sponsor needs to address in order to create a competitive advantage in its markets.
This model developed through the scenario approach will act as a robust production and labor-planning tool that is easily scalable to accommodate dynamic changes in the business environment. This also provides an opportunity to plan both production and labor levels in an integrated manner rather than the usual approach of arriving at a production plan depending on the plant capacity and demand and altering the work-force level to achieve the production plan. Also, this model comes up with a single workforce plan irrespective of the scenario in which plant may perform in the future periods. This model also forms the basis for the management’s decision on capacity augmentation and provides flexibility to change the firms operation to the dynamic changes in the market place at a faster pace. Model and results in final report.