Outline

  • Abstract
  • Keywords
  • 1. Introduction
  • 2. Model Description
  • 3. the Decision Model
  • 3.1. Expected Semi-Finished Product Inventory Level I
  • 3.2. Unfill Rate
  • 4. Model Approximation by Normal Distribution
  • 5. Solution of the Approximate Model
  • 6. Numerical Experiments
  • 6.1. the Effect of the Demand Commonality Pc
  • 6.2. Effect of Finished Product’s Unit Holding Cost Ch
  • 6.3. Effect of Penalty Cost Cp
  • 6.4. Effect of Utilization ρ
  • 6.5. Sensitivity Analysis and Approximation Performance
  • 7. Conclusion
  • Acknowledgments
  • Appendix A. Proofs
  • A.1. Proof of Proposition 1
  • A.2. Proof of Theorem 1
  • A.3. Proof of Theorem 2
  • References

رئوس مطالب

  • چکیده
  • کلید واژه ها
  • 1.مقدمه
  • 2.توصیف مدل
  • 3. مدل تصمیم گیری
  • 1.3 سطح ذخیره پیش بینی شده محصول نیمه نهایی
  • 2.3 میزان unfill
  • 4. تقریب مدل با استفاده از توزیع نرمال
  • 5. راه حل مدل تقریبی
  • 6. آزمایشات عددی
  • 7. نتیجه گیری
  • پیوست آ. اثبات ها
  • آ.1. اثبات گزاره 1
  • آ.2. اثبات تئوری 1
  • آ.3. اثبات تئوری 2

Abstract

The form postponement (FP) strategy is an important strategy for manufacturing firms to utilize to achieve a quick response to customer needs while keeping low inventory levels of finished products. It is an important and difficult task to design a supply chain that uses FP strategy to mitigate the conflict between inventory level and service level. To this end, we develop a two-stage tandem queuing network to model the supply chain. The first stage is the manufacturing process of the undifferentiated semi-finished product, which is produced on a Make-To-Stock basis: the inventory is controlled by base-stock policy. The second stage is the customization process based on customers’ specified requirements. There are two types of order: ordinary order and special order. The former can be met by customizing from semi-finished product, while the latter must be entirely customized beginning from the first stage. The customer orders arrive according to a Poisson process. We first derive the inventory level and fill rate, and then present a total cost model. It turns out that the model is intractable due to the Poisson distribution in the objective function. To analytically solve the problem, we use normal distribution as an approximation of the Poisson distribution, which works well when the parameter of the Poisson distribution is quite large. Finally, some numerical experiments are conducted and managerial insights are offered based on the numerical results.

Keywords: - - -

Conclusions

The form postponement strategy is an efficient tool to balance the tradeoff between high customization and quick response. In this paper, we developed a two-stage tandem queuing network with constant process time to evaluate the operational performance of a form postponement supply chain. Based on Zipkin’ result and Shebrooke’s result, we derived the closed-form performance measures, such as inventory level and unfill rate. By using normal approximation of Poisson distribution, we optimized gain managerial insights: (1) As the demand commonality increases, the optimal policy delays the CODP position and keeps higher base-stock levels; (2) As the finished product’s unit holding cost increases, it is better for the supply chain to set the CODP position more closely to the finished product node of the supply chain and reduce the base-stock level; (3) For the policy of constant penalty cost, larger penalty costs causes a more forward CODP position with larger inventory levels; (4) When the system is quite less congested, the optimal policy for the supply chain is Make-To-Order, and when the utilization is moderate, the later differentiation is favored for larger load. However, when the system becomes quite congested, the CODP position decreases as the utilization increases.

Our research can be further extended along the following three lines: (1) To consider that the semi-finished product inventory is controlled by (s,S) policy; (2) To let the processing time be subject to an arbitrary distribution; (3) To relax the assumption of independent Poisson demand and allow for more complex demand structure, e.g. the demand rate depends on the price and lead-time quotation, which may be more practical.

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