Technical note-optimal structural results for assemble-to-order generalized M-Systems
Date
2014
Authors
Nadar, E.
Akan, M.
Scheller-Wolf, A.
Editor(s)
Advisor
Supervisor
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Co-Supervisor
Instructor
Source Title
Operations Research
Print ISSN
0030-364X
Electronic ISSN
1526-5463
Publisher
INFORMS Inst.for Operations Res.and the Management Sciences
Volume
62
Issue
3
Pages
571 - 579
Language
English
Type
Journal Title
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Volume Title
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3
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25
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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. © 2014 INFORMS.
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Keywords
Assemble-to-order systems, Lattice-dependent policies, Markov decision processes, Optimal control, Flash memory, Learning algorithms, Markov processes, Allocation policies, Assemble-to-order, Infinite horizons, Inventory allocation, Inventory replenishment, Markov Decision Processes, Multiple components, Optimal controls, Structural optimization