Article ID: | iaor200470 |
Country: | United States |
Volume: | 11 |
Issue: | 2 |
Start Page Number: | 199 |
End Page Number: | 215 |
Publication Date: | Jun 2002 |
Journal: | Production and Operations Management |
Authors: | Mishra Ajay K., Mirchandani Parkash |
Keywords: | component sharing, supply chain |
Common components are used extensively for reasons including product postponement and expediting new product development. We consider a two-stage assemble-to-order system with two products having uniformly distributed demand, one common component, and product-specific components. We develop optimization models in which the cost-minimizing inventory of the components must be determined and allocated to products in order to meet product-specific service level constraints. We compare two different commonality models based on whether or not the products are prioritized. A distinctive feature of our study is the use of product-specific service levels. We compare our results with models using aggregate service levels.