Managing components for assemble‐to‐order products with lead‐time‐dependent pricing: The full‐shipment model

Vernon Ning Hsu, Chung Yee Lee and Kut C. So

Naval Research Logistics (NRL), 2007, vol. 54, issue 5, 510-523

Abstract: We study a component inventory planning problem in an assemble‐to‐order environment faced by many contract manufacturers in which both quick delivery and efficient management of component inventory are crucial for the manufacturers to achieve profitability in a highly competitive market. Extending a recent study in a similar problem setting by the same authors, we analyze an optimization model for determining the optimal component stocking decision for a contract manufacturer facing an uncertain future demand, where product price depends on the delivery times. In contrast to our earlier work, this paper considers the situation where the contract manufacturer needs to deliver the full order quantity in one single shipment. This delivery requirement is appropriate for many industries, such as the garment and toy industries, where the economies of scale in transportation is essential. We develop efficient solution procedures for solving this optimization problem. We use our model results to illustrate how the different model parameters affect the optimal solution. We also compare the results under this full‐shipment model with those from our earlier work that allows for multiple partial shipments. © 2007 Wiley Periodicals, Inc. Naval Research Logistics, 2007

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/nav.20223

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:wly:navres:v:54:y:2007:i:5:p:510-523

Access Statistics for this article

More articles in Naval Research Logistics (NRL) from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().