On the use of independent base-stock policies in assemble-to-order inventory systems with nonidentical lead times

On the use of independent base-stock policies in assemble-to-order inventory systems with nonidentical lead times

We consider Independent Base-Stock (IBS) policies in Assemble-to-Order (ATO) inventory systems with a general bill of materials and deterministic nonidentical lead times. The main drawback of IBS policies in this setting is that they keep the inventory position of each component constant without considering the availability of other components with longer lead times. We show that the cost of th...

Asymptotically Optimal Inventory Control for Assemble-to-Order Systems with Identical Lead Times

Optimizing multi-product assemble-to-order (ATO) inventory systems is a long-standing difficult problem. We consider ATO systems with identical component lead times and a general ‘bill of materials’. We use a related two-stage stochastic program (SP) to set a lower bound on the average inventory cost and develop inventory control policies for the dynamic ATO system using this SP. We apply the f...

Performance Evaluation of Lattice-Dependent Base-Stock and Rationing Policies for Assemble-to-Order Systems

Optimization of two-stage production/inventory systems under order base stock policy with advance demand information

It is important to share demand information among the members in supply chains. In recent years, production and inventory systems with advance demand information (ADI) have been discussed, where advance demand information means the information of demand which the decision maker obtains before the corresponding actual demand arrives. Appropriate production and inventory control using demand info...

Evaluation of Base-Stock Policies in Multiechelon Inventory Systems with State-Dependent Demands Part I: State-Independent Policies

This article analyzes a model of a multiechelon inventory system. The exogenous demands form Markov-modulated Poisson processes. That is, the demand rates are functions of an underlying Markov chain. Each location follows a base-stock policy which is independent of the state of the underlying Markov chain. We employ the exogenous transit mechanism introduced by Zipkin [7) and Svoronos and Zipki...