A stochastic programming based inventory policy for assemble-to-order systems with application to the W model

Operations Research

Volumn 58, Issue 4 PART 1, 2010, Pages 849-864

  Doǧru, Mustafa K ^a   Reiman, Martin I ^a   Wang, Qiong ^a  

^a LUCENT TECHNOLOGIES   (United States)

Author keywords

Approximations heuristics; Assemble to order; Component commonality; Inventory production; Multi item; Programming; Stochastic

Indexed keywords

APPROXIMATIONS/HEURISTICS; ASSEMBLE-TO-ORDER; COMPONENT COMMONALITY; INVENTORY/PRODUCTION; MULTI-ITEM; PROGRAMMING; STOCHASTIC;

INVENTORY CONTROL; NUMERICAL ANALYSIS; OPTIMIZATION; STOCHASTIC MODELS; STOCHASTIC SYSTEMS;

COMPUTER SYSTEMS PROGRAMMING;

EID: 77953560961     PISSN: 0030364X     EISSN: 15265463     Source Type: Journal    
DOI: 10.1287/opre.1090.0772     Document Type: Article

References (30)

1. Agrawal, M., M. A. Cohen. 2001. Optimal material control and performance evaluation in an assembly environment with component commonality. Naval Res. Logist. 48 409-429.
2. Akcay, Y., S. H. Xu. 2004. Joint inventory replenishment and component allocation optimization in an assemble-to-order system. Management Sci. 50 99-116.
3. Baker, K. R., M. J. Magazine, H. L. W. Nuttle. 1986. The effect of commonality on safety stock in a simple inventory model. Management Sci. 32(8) 982-988.
4. Bernstein, F., G. DeCroix, Y. Wang. 2007a. Incentives and commonality in a decentralized multiproduct assembly system. Oper. Res. 55(4) 630-646.
5. Bernstein, F., G. DeCroix, Y. Wang. 2007b. Allocation policies based on demand aggregation in an assemble-to-order system. Working paper, the Fuqua School of Business, Duke University, Durham, NC
6. Birge, J., F. Louveaux. 1997. Introduction to Stochastic Programming. Springer, New York.
7. de Kok, A. G., J. W. C. H. Visschers. 1999. Analysis of assembly systems with service level constraints. Internat. J. Production Econom. 59 313-326.
8. Deshpande, V., M. A. Cohen, K. Donohue. 2003. A threshold inventory rationing policy for service-differentiated demand classes. Management Sci. 49(6) 683-703.
9. Doǧru, M., M. I. Reiman, Q. Wang. 2010. Applications of stochastic programming to setting allocation rules for some assemble-to-order systems. In preparation.
10. Gerchak, Y., M. Henig. 1986. An inventory model with component commonality. Oper. Res. Lett. 5(3) 157-160.
11. Gerchak, Y., M. J. Magazine, A. B. Gamble. 1988. Component commonality with service level requirements. Management Sci. 34(6) 753-760.
12. Harrison, J. M., J. A. Van Mieghem. 1999. Multi-resource investment strategies: Operational hedging under demand uncertainty. Eur. J. Oper. Res. 113 17-29.
13. Hausman, W. H., H. L. Lee, A. X. Zhang. 1998. Order response time reliability in a multi-item inventory system. Eur. J. Oper. Res. 109 646-659.
14. Lu, Y., J.-S. Song. 2005. Order-based cost optimization in assemble-toorder systems. Oper. Res. 53(1) 151-169.
15. Lu, Y., J.-S. Song, D. D. Yao. 2003. Order fill rate, leadtime variability, and advance demand information in an assemble-to-order system. Oper. Res. 51(2) 292-308.
16. Lu, Y., J.-S. Song, D. D. Yao. 2005. Backorder minimization in multiproduct assemble-to-order systems. IIE Trans. 37 763-774.
17. Lu, Y., J.-S. Song, Y. Zhao. 2008. No-holdback allocation rules for continuous-time assemble-to-order systems. Working paper, the Fuqua School of Business, Duke University, Durham, NC.
18. Reiman, M. I. 2010. An inventory model with two demand classes. In preparation
19. Rosling, K. 1989. Optimal inventory policies for assembly systems under random demands. Oper. Res. 37 565-579.
20. Shapiro, A., A. Nemirovsky. 2005. On complexity of stochastic programming problems. V. Jeyakumar, A. M. Rubinov, eds. Continuous Optimization: Current Trends and Applications. Springer, New York, 111-144.
21. Song, J.-S. 1998. On the order fill rate in a multi-item, base-stock inventory system. Oper. Res. 46 831-845.
22. Song, J.-S. 2002. Order-based backorders and their implications in multiitem inventory systems. Management Sci. 48 499-516.
23. Song, J.-S., D. D. Yao. 2002. Performance analysis and optimization of assemble-to-order systems with random lead times. Oper. Res. 50(5) 889-903.
24. Song, J.-S., Y. Zhao. 2008. The value of component commonality in a dynamic inventory system with lead times. Working paper, the Fuqua School of Business, Duke University, Durham, NC.
25. Song, J.-S., P. Zipkin. 2003. Supply chain operations: Assemble-to-order systems. A. G. de Kok, S. C. Graves, eds. Supply Chain Management. Handbooks in Operations Research and Management Science, Vol.11. Elsevier, B.V., Amsterdam, 561-596.
26. Song, J.-S., S. H. Xu, B. Liu. 1999. Order fulfillment performance measures in an assemble-to-order system with stochastic leadtimes. Oper. Res. 47 131-149.
27. Van Mieghem, J. A. 2003. Capacity management, investment, and hedging: Review and recent developments. Manufacturing Service Oper. Management 5(4) 269-302.
28. Van Mieghem, J. A., N. Rudi. 2003. Newsvendor networks: Inventory management and capacity investment with discretionary activities. Manufacturing Service Oper. Management 4(4) 313-335.
29. Zhang, A. X. 1997. Demand fulfillment rates in an assemble-to-order system with multiple products and dependent demands. Production Oper. Management 6 309-324.
30. Zhao, Y., D. Simchi-Levi. 2006. Performance analysis and evaluation of assemble-to-order systems with stochastic sequential lead times. Oper. Res. 54(4) 706-724.