Make to Stock or Make to Order for BOM items in ATO Environment

• Main Authors: Yu-Jiun Chen, 陳郁鈞
• Other Authors: Gwo-Ji Sheen
• Format: Others
• Language: en_US
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/73268103049491557613

碩士 === 國立中央大學 === 工業管理研究所 === 92 === This paper studies how to decide a planning strategy for each assembly and raw material included in a variant Bill of Material (variant BOM) in the Assemble-to-order (ATO) environment. The arrival rate of the customer order which contains many different types of products follows a stochastic process. The individual arrival rates of different types of products are determined by a set of fixed probabilities. We try to determine each BOM item whether it would be assigned to make-to-order (MTO) planning strategy or make-to-stock (MTS) planning strategy. Furthermore, MTS items follow a (Q, r) inventory/production policy and are procured externally whereas MTO items are produced internally. On the basis of ATO manufacturing environment, we conduct a nonlinear, integer programming model to decide each BOM item whether it would be assigned to MTO or MTS and determine the replenishment batch Q and reorder point r for MTS item at the same time. For the Poisson demands, our objective is to lower the production lead time and minimize the total cost such as setup cost, holding cost, backorder cost and penalty cost. We extend the heuristic developed by [Chen, 2003] and use the AMPL/MINOS mathematical software to solve the model. The proposed model has been implemented by AMPL/MINOS. In the validation, we want to test whether this model can react our expected system behaviors by setting different parameter values. In the evaluation, we want to see how good and how fast does our heuristic show by comparing the complete enumeration approach.