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Description:
Assemble-to-Order (ATO)
system is an important operational strategy for manufacturing firms to
achieve both fast response to demand and low finished good inventory. This
strategy applies not only to manufacturers who provide customized products
(e.g., Dell, IBM), but also applies to mail-order and online retailers
(e.g., Amazon.com).
My research in this area
focuses on efficient inventory replenishment policy, common component
allocation rules and design of material flow topologies (e.g., component
commonality).
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Zhao, Y., D. Simchi-Levi (2006). Performance
Analysis and Evaluation of Assemble-to-Order Systems with Stochastic
Sequential Lead-times. Operations Research 54:
706-724.
Abstract: Assemble-to-Order
Systems represent important supply chain strategies that allow
manufacturers to better match supply and demand. In such a system,
manufacturers keep inventory of components and assemble finished goods only
after demand is realized. A long standing challenge in the inventory
control literature is the exact analysis of even simple assembly systems
with random demand and stochastic sequential lead-times. Real world
Assemble-to-Order systems, such as the one used by Dell Computers, pose
even more substantial challenges both analytically and computationally
because they involve both assembly and distribution systems. In this paper,
we developed a unified modeling approach, namely, the backward
flow-unit method, that facilitates exact analysis and efficient
evaluation of various Assemble-to-Order systems with stochastic sequential
lead-times, with multiple products and when component inventories are
controlled by either base-stock or batch ordering policies.
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Song, J.S., Y. Zhao (2008). The Value
of Component Commonality in A Dynamic Inventory System with Lead Time. Manufacturing
& Service Operations Management 11: 493-508.
Abstract: Component commonality
has been widely recognized as a key factor in achieving product variety at
low cost. Yet, the theory on the value of component commonality is rather
limited in the inventory literature. The existing results were built
primarily on single-period models or periodic-review models with zero lead
times. In this paper, we consider a continuous-review system with positive
lead times. We find that while component commonality is in general
beneficial, its value depends strongly on component costs, lead times and
dynamic allocation rules. Under certain conditions, several previous
findings based on static models do not hold here. In particular, component
commonality does not always generate inventory benefits under certain
commonly used allocation rules. We provide insight on when component
commonality generates inventory benefits and when it may not. We further
establish some asymptotic properties that connect component lead times and
costs to the impact of component commonality. Through numerical studies, we
demonstrate the value of commonality and its sensitivity to various system
parameters in between the asymptotic limits. In addition, we show how to
evaluate the system under a new allocation rule, a modified version of the
standard FIFO rule.
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Lu, Y., J.S.
Song, Y. Zhao (2009). Non-holdback
Allocation Rules in Assemble-to-Order Systems. Operations
Research 58: 691-705.
Abstract: This paper
analyzes a class of common-component allocation rules, termed no-holdback (NHB)
rules, in continuous-review assemble-to-order (ATO) systems. We assume that
component inventories are replenished following base-stock policies,
subject to positive lead times. Different from the usually assumed FCFS
component allocation rule, a NHB rule will not allocate a component to a
product demand unless doing so will lead to immediate fulfillment of that
demand. We identify metrics as well as cost and product structures under
which NHB rules outperform all other component allocation rules. For
systems with certain product structures, we obtain closed-form key
performance expressions for NHB rules and compare them with those under
FCFS. For general product structures, we present performance bounds and
approximations. Finally, we discuss the applicability of these results to
more general ATO systems.
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Zhao, Y.
(2009). Performance Analysis of
Assemble-to-Order Systems with Compound Poisson Demand and Batch Ordering
Policies. European Journal of Operational Research 198:
800-809.
Abstract: This paper
extends Zhao and Simchi-Levi (2006) to a class
of multi-product and multi-component Assemble-to-Order (ATO) system with
compound Poisson demand and continuous-time batch ordering policies. The
replenishment lead-times of components are stochastic, sequential and
exogenous. We derive exact expressions for key performance metrics under
either the assumption that each demand must be satisfied in full (non-split
orders), or the assumption that each unit of demand can be satisfied
separately (split orders). We also develop an efficient sampling method to
estimate these metrics, e.g., the expected delivery lead-times and the order-based
fill rates. Based on the analysis and a numerical study of an example
motivated by a real-world application, we characterize the impact of the
component interaction on system performance, demonstrate the efficiency of
the numerical method and quantify the impact of order splitting.
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