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Global dual sourcing: Tailored basesurge allocation to near and offshore production
 MANAGEMENT SCI
, 2010
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A Separation Principle for a Class of AssembletoOrder Systems with Expediting Operations Research 55(3
 603–609, © 2007 INFORMS 609
, 1996
"... informs ® doi 10.1287/opre.1060.0372 ..."
A separation principle for assembletoorder systems with expediting. Working paper, Graduate
, 2003
"... In an assembletoorder system, a wide variety of products are rapidly assembled from component inventories, in response to customer orders. Orders must be filled within a productspecific target leadtime. In the event that some of the components required to fill an order are outofstock, these com ..."
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In an assembletoorder system, a wide variety of products are rapidly assembled from component inventories, in response to customer orders. Orders must be filled within a productspecific target leadtime. In the event that some of the components required to fill an order are outofstock, these components are expedited at a high cost per unit. The objective is to minimize the expected infinite horizon discounted cost of nominal component production and expediting. This discounted formulation captures financial inventory holding costs. The levers for control are (1) sequencing orders for assembly (2) component production (3) component expediting. Under the assumption that expedited components have zero leadtime, the multidimensional assembletoorder control problem separates into singleitem inventory control problems. The optimal production and expediting policy for each component is independent of all other components. Hence the literature on singleitem inventory management with expediting or lost sales is directly relevant to the control of assembletoorder systems. Subject classifications: inventory/production: assembletoorder with delay constraints and expediting; stochastic optimal control
Inventory Control with Generalized Expediting
, 2001
"... We consider a singleitem, periodic review inventory control problem where discrete stochastic demand must be satisfied. When shortages occur, the unmet demand must be filled by some form of expediting. We allow a very general form for the cost structure of expediting, including the special case of ..."
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We consider a singleitem, periodic review inventory control problem where discrete stochastic demand must be satisfied. When shortages occur, the unmet demand must be filled by some form of expediting. We allow a very general form for the cost structure of expediting, including the special case of lost sales. Examples of expediting are overtime production, where production is allowed above and beyond shortfall, and premium freight shipments, where backlogged products are built early the same period they are needed and then shipped very quickly. For the infinite horizon discounted problem, we characterize the structure of the optimal expediting policy and show that an (s, S) policy is optimal for regular production. In certain cases we demonstrate that it may be optimal to use overtime production to build up inventory over and above the Traditionally, managers have controlled inventory by setting high enough inventory levels that the likelihood of stockouts is low, and allowing parts to be backordered when shortages
CONTROLS∗
"... We consider an inventory system in which inventory level fluctuates as a Brownian motion in the absence of control. The inventory continuously accumulates cost at a rate that is a general convex function of the inventory level, which can be negative when there is a backlog. At any time, the inven ..."
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We consider an inventory system in which inventory level fluctuates as a Brownian motion in the absence of control. The inventory continuously accumulates cost at a rate that is a general convex function of the inventory level, which can be negative when there is a backlog. At any time, the inventory level can be adjusted by a positive or negative amount, which incurs a fixed positive cost and a proportional cost. The challenge is to find an adjustment policy that balances the inventory cost and adjustment cost to minimize the expected total discounted cost. We provide a tutorial on using a threestep lowerbound approach to solving the optimal control problem under a discounted cost criterion. In addition, we prove that a fourparameter control band policy is optimal among all feasible policies. A key step is the constructive proof of the existence of a unique solution to the free boundary problem. The proof leads naturally to an algorithm to compute the four parameters of the optimal control band policy.
Expediting
, 2003
"... In an assembletoorder system, a wide variety of products are rapidly assembled from component inventories, in response to customer orders. Orders must be filled within a productspecific target leadtime. In the event that some of the components required to fill an order are outofstock, these com ..."
Abstract
 Add to MetaCart
In an assembletoorder system, a wide variety of products are rapidly assembled from component inventories, in response to customer orders. Orders must be filled within a productspecific target leadtime. In the event that some of the components required to fill an order are outofstock, these components are expedited at a high cost per unit. The objective is to minimize the expected infinite horizon discounted cost of nominal component production and expediting. This discounted formulation captures financial inventory holding costs. The levers for control are (1) sequencing orders for assembly (2) component production (3) component expediting. Under the assumption that expedited components have zero leadtime, the multidimensional assembletoorder control problem separates into singleitem inventory control problems. The optimal production and expediting policy for each component is independent of all other components. Hence the literature on singleitem inventory management with expediting or lost sales is directly relevant to the control of assembletoorder systems. Subject classifications: inventory/production: assembletoorder with delay constraints and expediting; stochastic optimal control