Performance evaluation of a multi-product CONWIP assembly system with correlated external demands

We study a multi‐product assembly production system in which individual components are made to meet various order types. We assume that orders arrive according to a Poisson process, but there is a fixed probability that an order requests a particular kit of different components. Under the CONWIP control mechanism, each component is produced by a flow line with several stations. To analyze this system, we develop an approximation algorithm based on a decomposition method. In the algorithm, a product‐form approximation technique as well as a matrix‐geometric method is used. Numerical results show that the accuracy of the approximation method is acceptable.