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Setting optimal planned leadtimes in configure-to-order assembly systems

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  • Jansen, Sjors
  • Atan, Zümbül
  • Adan, Ivo
  • Kok, Ton de

Abstract

We study a configure-to-order assembly system consisting of multiple parallel subassembly stages and one final assembly stage. Each stage has a stochastic leadtime. The system is controlled by planned leadtimes at each stage. Planned leadtimes are used to plan start and finish times at all stages. The system incurs holding cost for each stage from the planned start time of the stage until the final product is delivered to the customer. In addition, a penalty cost is incurred if the final assembly stage is late. The objective is to set the planned leadtimes for each stage such that the total expected cost is minimized. We prove that the optimal planned leadtimes satisfy a set of Newsvendor equations and show that the probability that a stage is “blamed” for the lateness of the system equals a Newsvendor fractile. We derive structural properties of the optimal solution and compare it with the optimal solution under an alternative holding cost regime.

Suggested Citation

  • Jansen, Sjors & Atan, Zümbül & Adan, Ivo & Kok, Ton de, 2019. "Setting optimal planned leadtimes in configure-to-order assembly systems," European Journal of Operational Research, Elsevier, vol. 273(2), pages 585-595.
    • Handle: RePEc:eee:ejores:v:273:y:2019:i:2:p:585-595
    DOI: 10.1016/j.ejor.2018.08.036
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    References listed on IDEAS

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    1. Chauhan, Satyaveer S. & Dolgui, Alexandre & Proth, Jean-Marie, 2009. "A continuous model for supply planning of assembly systems with stochastic component procurement times," International Journal of Production Economics, Elsevier, vol. 120(2), pages 411-417, August.
    2. Zümbül Atan & Ton de Kok & Nico P. Dellaert & Richard van Boxel & Fred Janssen, 2016. "Setting Planned Leadtimes in Customer-Order-Driven Assembly Systems," Manufacturing & Service Operations Management, INFORMS, vol. 18(1), pages 122-140, February.
    3. J. A. Buzacott & J. G. Shanthikumar, 1994. "Safety Stock versus Safety Time in MRP Controlled Production Systems," Management Science, INFORMS, vol. 40(12), pages 1678-1689, December.
    4. Candace Arai Yano, 1987. "Setting Planned Leadtimes in Serial Production Systems with Tardiness Costs," Management Science, INFORMS, vol. 33(1), pages 95-106, January.
    5. Ben-Ammar, Oussama & Dolgui, Alexandre & Wu, Desheng Dash, 2018. "Planned lead times optimization for multi-level assembly systems under uncertainties," Omega, Elsevier, vol. 78(C), pages 39-56.
    6. Atan, Zümbül & Ahmadi, Taher & Stegehuis, Clara & Kok, Ton de & Adan, Ivo, 2017. "Assemble-to-order systems: A review," European Journal of Operational Research, Elsevier, vol. 261(3), pages 866-879.
    7. Matsuura, Haruki & Tsubone, Hitoshi & Kanezashi, Masakazu, 1996. "Setting planned lead times for multi-operation jobs," European Journal of Operational Research, Elsevier, vol. 88(2), pages 287-303, January.
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    Cited by:

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    3. Taher Ahmadi & Zümbül Atan & Ton de Kok & Ivo Adan, 2019. "Optimal control policies for an inventory system with commitment lead time," Naval Research Logistics (NRL), John Wiley & Sons, vol. 66(3), pages 193-212, April.
    4. Slama, Ilhem & Ben-Ammar, Oussama & Thevenin, Simon & Dolgui, Alexandre & Masmoudi, Faouzi, 2022. "Stochastic program for disassembly lot-sizing under uncertain component refurbishing lead times," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1183-1198.

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