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Optimal Control of Supply Chain Systems with Assembly Operation

Chapter
Part of the Advances in Industrial Control book series (AIC)

Abstract

This chapter considers a supply chain system with assembly operation. The manufacturer has to make the ordering decisions for multiple types of raw materials from different suppliers in parallel and the production decisions on assembling finished goods using all types of raw materials. The system is subject to uncertainties of raw material delivery lead times, assembly processing times, customer demand arrivals, and possible breakdown of the assembly machine. The objective is to minimize the expected discounted cost including raw materials inventory costs, finished goods inventory cost, and demand backlog cost. The optimal integrated ordering and assembly policy is derived. The structural properties of the optimal cost function such as monotonicity and asymptotic behaviors are established explicitly for the special case with the maximum order size one. It is shown that the optimal policy can be characterized by a set of switching manifolds, which lead to a set of control regions to determine the optimal control decisions. This chapter ends with some discussion and notes.

Keywords

Optimal Policy Customer Demand Assembly Operation Supply Chain System Optimal Control Policy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag London 2013

Authors and Affiliations

  1. 1.School of ManagementUniversity of PlymouthPlymouthUK

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