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Positioning multiple decoupling points in a supply network

  • Sun, X.Y.
  • Ji, P.
  • Sun, L.Y.
  • Wang, Y.L.
Registered author(s):

    A decoupling point is the boundary between make-to-order (MTO) and make-to-stock (MTS). Many researchers have discussed the decoupling point in a serial supply chain. In reality, a product consists of many parts and components, and, consequently, their supplies form a supply network instead of a supply chain. This paper positions multiple decoupling points of a product in a complicated supply network instead of a supply chain. Based on the bill of materials (BOM) of a product, a mathematical model is developed in order to find the multi-decoupling points in the supply network through MTO and MTS integration, with the objective of minimizing the overall cost subject to satisfying customer delivery time. The results show that the hybrid strategy is better than a pure MTO or MTS strategy in a dynamic supply network and tight delivery deadline environment. Based on the mathematical model and its solution, the mutual impact between the multiple decoupling points in the supply network is investigated through sensitivity analysis. Finally, this paper makes multiple decoupling points more understandable.

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    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 113 (2008)
    Issue (Month): 2 (June)
    Pages: 943-956

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    Handle: RePEc:eee:proeco:v:113:y:2008:i:2:p:943-956
    Contact details of provider: Web page: http://www.elsevier.com/locate/ijpe

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    1. Hsu, Hsi-Mei & Wang, Wen-Pai, 2004. "Dynamic programming for delayed product differentiation," European Journal of Operational Research, Elsevier, vol. 156(1), pages 183-193, July.
    2. Kisperska-Moron, Danuta, 2003. "Responsibilities for inventory decisions in Polish manufacturing companies," International Journal of Production Economics, Elsevier, vol. 81(1), pages 129-139, January.
    3. van Donk, Dirk Pieter, 2001. "Make to stock or make to order: The decoupling point in the food processing industries," International Journal of Production Economics, Elsevier, vol. 69(3), pages 297-306, February.
    4. van der Vlist, Piet & Hoppenbrouwers, Jurgen J. E. M. & Hegge, Herman M. H., 1997. "Extending the enterprise through multi-level supply control," International Journal of Production Economics, Elsevier, vol. 53(1), pages 35-42, November.
    5. repec:hal:journl:hal-00471415 is not listed on IDEAS
    6. Olhager, Jan & Ostlund, Bjorn, 1990. "An integrated push-pull manufacturing strategy," European Journal of Operational Research, Elsevier, vol. 45(2-3), pages 135-142, April.
    7. S. Rajagopalan, 2002. "Make to Order or Make to Stock: Model and Application," Management Science, INFORMS, vol. 48(2), pages 241-256, February.
    8. Li, D. & O'Brien, C., 2001. "A quantitative analysis of relationships between product types and supply chain strategies," International Journal of Production Economics, Elsevier, vol. 73(1), pages 29-39, August.
    9. Chang, Sheng-Hung & Pai, Ping-Feng & Yuan, Kuo-Jung & Wang, Bo-Chang & Li, Rong-Kwei, 2003. "Heuristic PAC model for hybrid MTO and MTS production environment," International Journal of Production Economics, Elsevier, vol. 85(3), pages 347-358, September.
    10. Olhager, Jan, 2003. "Strategic positioning of the order penetration point," International Journal of Production Economics, Elsevier, vol. 85(3), pages 319-329, September.
    11. Soman, Chetan Anil & van Donk, Dirk Pieter & Gaalman, Gerard, 2004. "Combined make-to-order and make-to-stock in a food production system," International Journal of Production Economics, Elsevier, vol. 90(2), pages 223-235, July.
    12. Hull, Bradley, 2005. "The role of elasticity in supply chain performance," International Journal of Production Economics, Elsevier, vol. 98(3), pages 301-314, December.
    13. Kim, Ilhyung & Tang, Christopher S., 1997. "Lead time and response time in a pull production control system," European Journal of Operational Research, Elsevier, vol. 101(3), pages 474-485, September.
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