Technical Note—Optimal Structural Results for Assemble-to-Order GeneralizedM-Systems
Emre Nadar, Mustafa Akan, Alan Scheller-Wolf
Operations Research · 2014 · Volume 62 · Issue 3
Abstract
We consider an assemble-to-order generalized M -system with multiple components and multiple products, batch ordering of components, random lead times, and lost sales. We model the system as an infinite-horizon Markov decision process and seek an optimal policy that specifies when a batch of components should be produced (i.e., inventory replenishment) and whether an arriving demand for each product should be satisfied (i.e., inventory allocation). We characterize optimal inventory replenishment and allocation policies under a mild condition on component batch sizes via a new type of policy: lattice-dependent base stock and lattice-dependent rationing .
Keywords
assemble-to-order systems, Markov decision processes, optimal control, lattice-dependent policies
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