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Dual-channel component replenishment problem in an assemble-to-order system

Author

Listed:
  • Zhishuang Yao
  • Loo Lee
  • Ek Chew
  • Vernon Hsu
  • Wikrom Jaruphongsa

Abstract

This article considers a component inventory problem in an assemble-to-order system where the assemble-to-order manufacturer faces a single-period stochastic demand for a single product created from multiple components. After the demand is realized, required components that are not available from inventory can be obtained using two sourcing channels that have different prices and lead times. The considered problem is formulated and solved analytically and the structural properties of its optimal solutions are explored. Computational experiments are performed to demonstrate the efficiency of the solution methods and comparisons are made between the performance of assemble-to-order systems with single- and dual-channel procurement approaches. It is also demonstrated that the proposed approach can be extended to the problem that considers multiple sourcing channels for components.

Suggested Citation

  • Zhishuang Yao & Loo Lee & Ek Chew & Vernon Hsu & Wikrom Jaruphongsa, 2013. "Dual-channel component replenishment problem in an assemble-to-order system," IISE Transactions, Taylor & Francis Journals, vol. 45(3), pages 229-243.
    • Handle: RePEc:taf:uiiexx:v:45:y:2013:i:3:p:229-243
    DOI: 10.1080/0740817X.2012.676748
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    Cited by:

    1. Li, Yanhai & Ou, Jinwen, 2020. "Optimal ordering policy for complementary components with partial backordering and emergency replenishment under spectral risk measure," European Journal of Operational Research, Elsevier, vol. 284(2), pages 538-549.
    2. 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.
    3. Sobhani, A. & Wahab, M.I.M. & Neumann, W.P., 2017. "Incorporating human factors-related performance variation in optimizing a serial system," European Journal of Operational Research, Elsevier, vol. 257(1), pages 69-83.

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