Design and performance evaluation of an assemble-to-order system

We study a multi-component production/inventory system in which individual components are made to meet various demand types. We assume that the demands arrive according to a Poisson process, but there is a fixed probability that a demand requests a particular kit of different components. Each component is produced by a flow line with several stations in which the processing times of each station follow a two-stage Coxian distribution. The production of each component is operated by an independent base-stock policy with blocking. We assume that the time needed to assemble final products follows a general distribution and the capacity of an assembling facility is sufficiently large. The objective of this study is to obtain key performance measures such as the distribution of the number of each orders for each final product and the mean time of fulfilling a customer order. The basic principle of the proposed approximation method is to decompose the original system into a set of subsystems, each subsystem being associated with a flow line. Each subsystem is analyzed in solation using a Marie's method. An iterative procedure is then used to determine the unknown parameters of each subsystem. Numerical results show that the accuracy of the approximation method is acceptable.