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COMPONENT COMMONALITY: MODELS WITH PRODUCT‐SPECIFIC SERVICE CONSTRAINTS*
Author(s) -
MIRCHANDANI PRAKASH,
MISHRA AJAY K.
Publication year - 2002
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.2002.tb00491.x
Subject(s) - expediting , postponement , component (thermodynamics) , computer science , product (mathematics) , service (business) , order (exchange) , aggregate (composite) , operations research , business , marketing , systems engineering , mathematics , physics , geometry , finance , thermodynamics , materials science , engineering , composite material
Common components are used extensively for reasons including product postponement and expediting new product development. We consider a two‐stage assemble‐to‐order system with two products having uniformly distributed demand, one common component, and product‐specific components. We develop optimization models in which the cost‐minimizing inventory of the components must be determined and allocated to products in order to meet product‐specific service level constraints. We compare two different commonality models based on whether or not the products are prioritized. A distinctive feature of our study is the use of product‐specific service levels. We compare our results with models using aggregate service levels.