Article ID: | iaor20102856 |
Volume: | 36 |
Issue: | 4 |
Start Page Number: | 506 |
End Page Number: | 512 |
Publication Date: | Jul 2008 |
Journal: | Operations Research Letters |
Authors: | Ou Jihong, Feng Youyi, Pang Zhan |
Keywords: | make-to-stock, assembly |
We study the optimal control of an assembly system that produces one assembled-to-order final product with multiple made-to-stock components and sells it at variable price. It is shown that a threshold control on component production, product price, and product orders maximizes total discounted profit over an infinite horizon.