Managing broader product lines through delayed differentiation using vanilla boxes
Article Abstract:
A study was conducted to analyze an assembly process based on semi-finished products called vanilla boxes that allows the customization of products within short lead times. The model supports issues associated with product line properties, demand features and assembly time characteristics. The effect of correlation in product demands and changes in assembly capacity on the performance of a vanilla assembly processes and the optimal inventory and configuration of vanilla boxes was also examined. The model was extended to support both final assembly and vanilla building in a sample plant with a multi-period framework. Results indicated that increases in variances correlated with a rise in cost incurred. Findings also showed that the vanilla process supports lower costs under negative than against positive correlation.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1998
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Echelon reorder points, installation reorder points, and the value of centralized demand information
Article Abstract:
A study was conducted to analyze a serial inventory supporting N stages wherein material flows from an outside supplier to stage N, then to stage N-1, until to stage 1 where random customer demand arises. Each stage refreshes a stage-specific inventory position based on a stage-specific reorder point/order quantity policy. Two types of policies were considered in the study, namely, one based on echelon stock and another on installation stock. A computational study was then carried out to evaluate the value of centralized demand information. Numerical proofs were given on the importance of centralized demand information. Results indicated that a serial system supporting N stages can be partitioned into N single-stage systems supporting random reorder points.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1998
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Using the deterministic EOQ formula in stochastic inventory control
Article Abstract:
An analysis of a standard single-item continuous-review inventory system with stationary stochastic demand is presented. A (Q, r)-policy controls the inventory. The inventory position pertains to the inventory on hand plus outstanding orders and minus backorders. Replenishment orders are sent after a certain leadtime while stockouts are backordered. The problem involves the determination of the optimal control parameters Q and r. A recent study has suggested that the maximum relative error is bounded by 0.125. In this study, a slightly lower bound for the relative cost increase when using the deterministic EOQ formula as a heuristic solution when demands are stochastic is presented. Circumstances under which this improved bound is tight are also discussed.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1996
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