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Technical Note---Optimal Structural Results for Assemble-to-Order Generalized M -Systems

Author

Listed:
  • Emre Nadar

    (Department of Industrial Engineering, Bilkent University, 06800 Ankara, Turkey)

  • Mustafa Akan

    (Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

  • Alan Scheller-Wolf

    (Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

Abstract

We consider an assemble-to-order generalized M -system with multiple components and multiple products, batch ordering of components, random lead times, and lost sales. We model the system as an infinite-horizon Markov decision process and seek an optimal policy that specifies when a batch of components should be produced (i.e., inventory replenishment) and whether an arriving demand for each product should be satisfied (i.e., inventory allocation). We characterize optimal inventory replenishment and allocation policies under a mild condition on component batch sizes via a new type of policy: lattice-dependent base stock and lattice-dependent rationing .

Suggested Citation

  • Emre Nadar & Mustafa Akan & Alan Scheller-Wolf, 2014. "Technical Note---Optimal Structural Results for Assemble-to-Order Generalized M -Systems," Operations Research, INFORMS, vol. 62(3), pages 571-579, June.
    • Handle: RePEc:inm:oropre:v:62:y:2014:i:3:p:571-579
    DOI: 10.1287/opre.2014.1271
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    References listed on IDEAS

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    Cited by:

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    2. ElHafsi, Mohsen & Fang, Jianxin & Hamouda, Essia, 2020. "A novel decomposition-based method for solving general-product structure assemble-to-order systems," European Journal of Operational Research, Elsevier, vol. 286(1), pages 233-249.
    3. ElHafsi, Mohsen & Fang, Jianxin & Camus, Herve, 2018. "Optimal control of a continuous-time W-configuration assemble-to-order system," European Journal of Operational Research, Elsevier, vol. 267(3), pages 917-932.
    4. Albrecht, Martin, 2017. "Optimization of safety stocks in models with an order service level objective or constraint," European Journal of Operational Research, Elsevier, vol. 263(3), pages 900-909.
    5. 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.
    6. Walid W. Nasr, 2022. "Inventory systems with stochastic and batch demand: computational approaches," Annals of Operations Research, Springer, vol. 309(1), pages 163-187, February.
    7. Martin Albrecht, 2021. "Component Allocation in Make-to-stock Assembly Systems," SN Operations Research Forum, Springer, vol. 2(2), pages 1-19, June.
    8. Karaarslan, Gönül A. & Atan, Zümbül & de Kok, Ton & Kiesmüller, Gudrun P., 2018. "Optimal and heuristic policies for assemble-to-order systems with different review periods," European Journal of Operational Research, Elsevier, vol. 271(1), pages 80-96.
    9. Kim, Eungab & Park, Taeho, 2016. "Admission and inventory control of a single-component make-to-order production system with replenishment setup cost and lead time," European Journal of Operational Research, Elsevier, vol. 255(1), pages 91-102.
    10. Lijian Lu & Jing‐Sheng Song & Hanqin Zhang, 2015. "Optimal and asymptotically optimal policies for assemble‐to‐order n‐ and W‐systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 62(8), pages 617-645, December.
    11. Kai Huang & Ton de Kok, 2015. "Optimal FCFS allocation rules for periodic‐review assemble‐to‐order systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 62(2), pages 158-169, March.

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