Chapter
Apr 26, 2012
Optimal Dynamic Substitution Policy for Components in an Assemble-to-Order System
Authors: Yongqiang Liu [email protected], Qing Chang [email protected], Xiaohong Zhang [email protected], and Hui GaoAuthor Affiliations
Publication: ICCTP 2009: Critical Issues In Transportation Systems Planning, Development, and Management
Abstract
In assemble-to-order system, the substitution of higher-class components for lower-class components is often applied when the latter are stock-out. But the decision for substitution should be made in advance in practice. How to manage the substitution in such a system is of managerial interest. We model this scenario as a two-stage mathematical programming where the first step is to determine how many to order for each product at the beginning of the selling season, and the second step is to explore the substitution rule. We exploit the structural properties of the substitution rule and present a dynamic substitution policy. Then we show that our substitution policy is a threshold policy and present the upper bound of the threshold.
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© 2009 American Society of Civil Engineers.
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Published online: Apr 26, 2012
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School of Electronics and Information Engineering, Beijing University of Aeronautics and Astronautics, Beijing 100191, China;. E-mail: [email protected]
School of Electronics and Information Engineering, Beijing University of Aeronautics and Astronautics, Beijing 100191, China;. E-mail: [email protected]
School of Politics and Public Administration, Soochow University, Suzhou 215006, China. E-mail: [email protected]
Hui Gao
China Spacesat Corporation Ltd, Beijing 100191, China
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