Article ID: | iaor2001615 |
Country: | United States |
Volume: | 47 |
Issue: | 1 |
Start Page Number: | 131 |
End Page Number: | 149 |
Publication Date: | Jan 1999 |
Journal: | Operations Research |
Authors: | Xu Susan H., Song Jing-Sheng, Liu Bin |
Keywords: | production, probability |
We study a multicomponent, multiproduct production and inventory system in which individual components are made to stock but final products are assembled to customer orders. Each component is produced by an independent production facility with finite capacity, and component inventory is controlled by an independent base‐stock policy. For any given base‐stock policy, we derive the key performance measures, including the probability of fulfilling a customer order within any specified time window. Computational procedures and numerical examples are also presented. A similar approach applies to the generic multi‐item make‐to‐stock inventory systems in which a typical customer order consists of a kit of items.