Lecture: Inventory and Production Decisions
Professor Vernon Hsu from the George Mason University School of Management will deliver the sixth lecture in the Spring 2006 Operations Research / Management Science Seminar series.
Title: Inventory and Production Decisions for an Assemble-to-Order System with Uncertain Demand and Limited Assembly Capacity
Abstract: In this presentation, we consider a production and inventory problem faced by a contract assembler who needs to respond to an order of a single product with multiple components to be procured from component suppliers. Late confirmation of order quantity from the customer, long component procurement lead times, and limited in-house assembly capacity may leave the manufacturer insufficient time to produce the total order quantity. One strategy to meet this challenge is to procure components or even assemble some quantity of the finished product before receiving actual order quantity from the customer. We develop a quantitative model that will evaluate the optimal decisions under this strategy. The overall objective of the model is to determine optimal quantity of components procured and finished product assembled prior to the confirmation of actual order quantity in order to minimize the total overstocking costs of components/finished product as well as the shortage cost of the finished product. An efficient solution procedure and some sensitivity results will be presented.
This series is organized by the UMass Amherst INFORMS Student Chapter. Support for this series is provided by the Isenberg School of Management, the Department of Finance and Operations Management, and the John F. Smith Memorial Fund.
Check here for more details about this speaker series.
