No-Holdback Allocation Rules for Continuous-Time Assemble-to-Order Systems

Yingdong Lu (), Jing-Sheng Song () and Yao Zhao ()
Additional contact information
Yingdong Lu: IBM Research, Yorktown Heights, New York 10598
Jing-Sheng Song: Fuqua School of Business, Duke University, Durham, North Carolina 27708, and Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, 200052, China
Yao Zhao: Department of Supply Chain Management and Marketing Sciences, Rutgers University, Newark, New Jersey 07102

Operations Research, 2010, vol. 58, issue 3, 691-705

Abstract: This paper analyzes a class of common-component allocation rules, termed no-holdback (NHB) rules, in continuous-review assemble-to-order (ATO) systems with positive lead times. The inventory of each component is replenished following an independent base-stock policy. In contrast to the usually assumed first-come-first-served (FCFS) component allocation rule in the literature, an NHB rule allocates a component to a product demand only if it will yield immediate fulfillment of that demand. We identify metrics as well as cost and product structures under which NHB rules outperform all other component allocation rules. For systems with certain product structures, we obtain key performance expressions and compare them to those under FCFS. For general product structures, we present performance bounds and approximations. Finally, we discuss the applicability of these results to more general ATO systems.

Keywords: stochastic multi-item inventory system; assemble-to-order; base-stock policy; common-component allocation rule; non-FCFS; sample-path analysis (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://dx.doi.org/10.1287/opre.1090.0785 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:58:y:2010:i:3:p:691-705

Access Statistics for this article

More articles in Operations Research from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().