IDEAS home Printed from https://ideas.repec.org/a/bla/popmgt/v6y1997i3p309-324.html
   My bibliography  Save this article

Demand Fulfillment Rates In An Assembleto‐ Order System With Multiple Products And Dependent Demands

Author

Listed:
  • ALEX X. ZHANG

Abstract

This paper presents a model for evaluating product fulfillment rates in an assemble‐to‐order system with a two‐level bill‐of‐material structure (products and components). Inventories are kept at the component level and are used to support service levels to product demands; each component is managed under a periodically reviewed, decentralized order‐up‐to policy. Product demands are correlated in a given period but are independent across periods. We develop the demand fulfillment rate for each product when demands are filled based on a first‐come‐first‐served discipline with limited priorities for different products within a period. We show that the fulfillment rate can be expressed as a multivariate normal probability when the product demands follow a multivariate normal distribution. We then use a numerical example to discuss computational issues and bounds associated with the evaluation of the demand fulfillment rates. Finally, we consider a model for minimizing the total inventory investment subject to given product demand fulfillment rates.

Suggested Citation

  • Alex X. Zhang, 1997. "Demand Fulfillment Rates In An Assembleto‐ Order System With Multiple Products And Dependent Demands," Production and Operations Management, Production and Operations Management Society, vol. 6(3), pages 309-324, September.
    • Handle: RePEc:bla:popmgt:v:6:y:1997:i:3:p:309-324
    DOI: 10.1111/j.1937-5956.1997.tb00433.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1937-5956.1997.tb00433.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1937-5956.1997.tb00433.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Charles P. Schmidt & Steven Nahmias, 1985. "Optimal Policy for a Two-Stage Assembly System under Random Demand," Operations Research, INFORMS, vol. 33(5), pages 1130-1145, October.
    2. Morris A. Cohen & Paul R. Kleindorfer & Hau L. Lee, 1988. "Service Constrained (s, S) Inventory Systems with Priority Demand Classes and Lost Sales," Management Science, INFORMS, vol. 34(4), pages 482-499, April.
    3. Ricardo Ernst & David F. Pyke, 1992. "Component part stocking policies," Naval Research Logistics (NRL), John Wiley & Sons, vol. 39(4), pages 509-529, June.
    4. Nesim Erkip & Warren H. Hausman & Steven Nahmias, 1990. "Optimal Centralized Ordering Policies in Multi-Echelon Inventory Systems with Correlated Demands," Management Science, INFORMS, vol. 36(3), pages 381-392, March.
    5. Yigal Gerchak & Mordechai Henig, 1989. "Component commonality in assemble‐to‐order systems: Models and properties," Naval Research Logistics (NRL), John Wiley & Sons, vol. 36(1), pages 61-68, February.
    6. J. Christopher Mitchell, 1988. "Multi-Item Inventory Systems with a Service Objective," Operations Research, INFORMS, vol. 36(5), pages 747-755, October.
    7. J. F. Chen & W. E. Wilhelm, 1994. "Optimizing the allocation of components to kits in small‐lot, multiechelon assembly systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 41(2), pages 229-256, March.
    8. Jonsson, Henrik & Silver, Edward A., 1989. "Common component inventory problems with a budget constraint: Heuristics and upper bounds," Engineering Costs and Production Economics, Elsevier, vol. 18(1), pages 71-81, October.
    9. M. Eric Johnson & Hau L. Lee & Tom Davis & Robert Hall, 1995. "Expressions for item fill rates in periodic inventory systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 42(1), pages 57-80, February.
    10. Kenneth R. Baker & Michael J. Magazine & Henry L. W. Nuttle, 1986. "The Effect of Commonality on Safety Stock in a Simple Inventory Model," Management Science, INFORMS, vol. 32(8), pages 982-988, August.
    11. Yigal Gerchak & Michael J. Magazine & A. Bruce Gamble, 1988. "Component Commonality with Service Level Requirements," Management Science, INFORMS, vol. 34(6), pages 753-760, June.
    12. Kaj Rosling, 1989. "Optimal Inventory Policies for Assembly Systems Under Random Demands," Operations Research, INFORMS, vol. 37(4), pages 565-579, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hausman, Warren H. & Lee, Hau L. & Zhang, Alex X., 1998. "Joint demand fulfillment probability in a multi-item inventory system with independent order-up-to policies," European Journal of Operational Research, Elsevier, vol. 109(3), pages 646-659, September.
    2. Stephen A. Smith & Narendra Agrawal, 2000. "Management of Multi-Item Retail Inventory Systems with Demand Substitution," Operations Research, INFORMS, vol. 48(1), pages 50-64, February.
    3. Yeu-Shiang Huang & Hau-Wen Lo & Jyh-Wen Ho, 2021. "Effects of component commonality and perishability on inventory control in assemble-to-order systems," Operational Research, Springer, vol. 21(1), pages 205-229, March.
    4. Narendra Agrawal & Morris A. Cohen, 2001. "Optimal material control in an assembly system with component commonality," Naval Research Logistics (NRL), John Wiley & Sons, vol. 48(5), pages 409-429, August.
    5. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    6. Yingdong Lu & Jing-Sheng Song, 2005. "Order-Based Cost Optimization in Assemble-to-Order Systems," Operations Research, INFORMS, vol. 53(1), pages 151-169, February.
    7. Amit Eynan & Meir J. Rosenblatt, 2007. "The impact of component commonality on composite assembly policies," Naval Research Logistics (NRL), John Wiley & Sons, vol. 54(6), pages 615-622, September.
    8. Hillier, Mark S., 2002. "Using commonality as backup safety stock," European Journal of Operational Research, Elsevier, vol. 136(2), pages 353-365, January.
    9. Jing-Sheng Song & Candace A. Yano & Panupol Lerssrisuriya, 2000. "Contract Assembly: Dealing with Combined Supply Lead Time and Demand Quantity Uncertainty," Manufacturing & Service Operations Management, INFORMS, vol. 2(3), pages 287-296, July.
    10. Ricardo Ernst & David F. Pyke, 1992. "Component part stocking policies," Naval Research Logistics (NRL), John Wiley & Sons, vol. 39(4), pages 509-529, June.
    11. Fernando Bernstein & Gregory A. DeCroix & Yulan Wang, 2007. "Incentives and Commonality in a Decentralized Multiproduct Assembly System," Operations Research, INFORMS, vol. 55(4), pages 630-646, August.
    12. de Kok, Ton G. & Visschers, Jeremy W. C. H., 1999. "Analysis of assembly systems with service level constraints," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 313-326, March.
    13. Albert Y. Ha, 2000. "Stock Rationing in an M/E k /1 Make-to-Stock Queue," Management Science, INFORMS, vol. 46(1), pages 77-87, January.
    14. Morris A. Cohen & Paul R. Kleindorfer & Hau L. Lee & David F. Pyke, 1992. "Multi‐item service constrained (s, S) policies for spare parts logistics systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 39(4), pages 561-577, June.
    15. Narendra Agrawal & Stephen A. Smith, 2003. "Optimal retail assortments for substitutable items purchased in sets," Naval Research Logistics (NRL), John Wiley & Sons, vol. 50(7), pages 793-822, October.
    16. Susan H. Xu & Zhaolin Li, 2007. "Managing a Single-Product Assemble-to-Order System with Technology Innovations," Management Science, INFORMS, vol. 53(9), pages 1467-1485, September.
    17. Lingxiu Dong & Hau L. Lee, 2003. "Optimal Policies and Approximations for a Serial Multiechelon Inventory System with Time-Correlated Demand," Operations Research, INFORMS, vol. 51(6), pages 969-980, December.
    18. Hillier, Mark S., 2002. "The costs and benefits of commonality in assemble-to-order systems with a (Q,r)-policy for component replenishment," European Journal of Operational Research, Elsevier, vol. 141(3), pages 570-586, September.
    19. Nonås, Sigrid Lise, 2009. "Finding and identifying optimal inventory levels for systems with common components," European Journal of Operational Research, Elsevier, vol. 193(1), pages 98-119, February.
    20. Mark S. Hillier, 1999. "Product commonality in multiple‐period, make‐to‐stock systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 46(6), pages 737-751, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:popmgt:v:6:y:1997:i:3:p:309-324. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1937-5956 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.