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Analysis and evaluation of an Assemble-to-Order system with batch ordering policy and compound Poisson demand

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  • Zhao, Yao

Abstract

We consider a multi-product and multi-component Assemble-to-Order (ATO) system where the external demand follows compound Poisson processes and component inventories are controlled by continuous-time batch ordering policies. The replenishment lead-times of components are stochastic, sequential and exogenous. Each element of the bill of material (BOM) matrix can be any non-negative integer. Components are committed to demand on a first-come-first-serve basis. We derive exact expressions for key performance metrics under either the assumption that each demand must be satisfied in full (non-split orders), or the assumption that each unit of demand can be satisfied separately (split orders). We also develop an efficient sampling method to estimate these metrics, e.g., the expected delivery lead-times and the order-based fill-rates. Based on the analysis and a numerical study of an example motivated by a real world application, we characterize the impact of the component interaction on system performance, demonstrate the efficiency of the numerical method and quantify the impact of order splitting.

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  • Zhao, Yao, 2009. "Analysis and evaluation of an Assemble-to-Order system with batch ordering policy and compound Poisson demand," European Journal of Operational Research, Elsevier, vol. 198(3), pages 800-809, November.
    • Handle: RePEc:eee:ejores:v:198:y:2009:i:3:p:800-809
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    1. Gao, Chunyan & Shen, Houcai & Cheng, T.C.E., 2010. "Order-fulfillment performance analysis of an assemble-to-order system with unreliable machines," International Journal of Production Economics, Elsevier, vol. 126(2), pages 341-349, August.
    2. Rahimi-Ghahroodi, S. & Al Hanbali, A. & Vliegen, I.M.H. & Cohen, M.A., 2019. "Joint optimization of spare parts inventory and service engineers staffing with full backlogging," International Journal of Production Economics, Elsevier, vol. 212(C), pages 39-50.
    3. Lengu, D. & Syntetos, A.A. & Babai, M.Z., 2014. "Spare parts management: Linking distributional assumptions to demand classification," European Journal of Operational Research, Elsevier, vol. 235(3), pages 624-635.
    4. van Jaarsveld, W.L. & Dollevoet, T.A.B., 2011. "Spare parts inventory control for an aircraft component repair shop," Econometric Institute Research Papers EI2011-24, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    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. Tan, Ken Seng & Wei, Pengyu & Wei, Wei & Zhuang, Sheng Chao, 2020. "Optimal dynamic reinsurance policies under a generalized Denneberg’s absolute deviation principle," European Journal of Operational Research, Elsevier, vol. 282(1), pages 345-362.
    8. Elhafsi, Mohsen & Hamouda, Essia, 2015. "Managing an assemble-to-order system with after sales market for components," European Journal of Operational Research, Elsevier, vol. 242(3), pages 828-841.
    9. Mohammed Hichame Benbitour & Evren Sahin & Yves Dallery, 2019. "The use of rush deliveries in periodic review assemble-to-order systems," Post-Print hal-01997380, HAL.

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