An Optimal Decision Model of Production-Inventory with MTS and ATO Hybrid Model Considering Uncertain Demand

This paper presents an optimization decision model for a production system that comprises the hybrid make-to-stock/assemble-to-order (MTS/ATO) organization mode with demand uncertainty, which can be described as a two-stage decision model. In the first decision stage (i.e., before acquiring the actu...

Full description

Saved in:
Bibliographic Details
Published in:Mathematical problems in engineering 2015, Vol.2015 (2015), p.1-12
Main Authors: Li, Shuangyan, Li, Xia-Miao, Li, Xialian, Zhang, Dezhi, Qian, Qi
Format: Article
Language:English
Subjects:
Commonality
Customer satisfaction
Customers
Demand
Hybrid systems
Inventories
Inventory control
Inventory management
Manufacturing
Mathematical models
Mathematical problems
Optimization
Procurement
Production planning
Risk
Stockpiling
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper presents an optimization decision model for a production system that comprises the hybrid make-to-stock/assemble-to-order (MTS/ATO) organization mode with demand uncertainty, which can be described as a two-stage decision model. In the first decision stage (i.e., before acquiring the actual demand information of the customer), we have studied the optimal quantities of the finished products and components, while in the second stage (i.e., after acquiring the actual demand information of the customer), we have made the optimal decision on the assignment of components to satisfy the remaining demand. The optimal conditions on production and inventory decision are deduced, as well as the bounds of the total procurement quantity of the components in the ATO phase and final products generated in the MTS phase. Finally, an example is given to illustrate the above optimal model. The findings are shown as follows: the hybrid MTS and ATO production system reduces uncertain demand risk by arranging MTS phase and ATO phase reasonably and improves the expected profit of manufacturer; applying the strategy of component commonality can reduce the total inventory level, as well as the risk induced by the lower accurate demand forecasting.
ISSN:1024-123X
1563-5147
DOI:10.1155/2015/241536