Two-stage Component Commonality Inventory Model With Guaranteed Delivery Time

With the rapid development of technology and increasingly fierce marketcompetition, enterprise production operating systems and operation managementface enormous challenges. Main features are: faster product replacement;production style approach to customized; customers become increasinglydemanding delivery time, the time factor as customer focus, has become a criticalcompetitive factor for enterprises……Delivery time is undoubtedly one of the mostimportant time competitive factors. Delivery time can not only affect the needs ofcustomers, in assembly-to-order enterprises affect number and size of orders, butalso affect inventory costs, product prices and customer satisfaction.In order to adapt to changes in the competitive environment, businessdevelopment and manufacture strategies must also change. Many manufacturingenterprises, especially assembly-to-order enterprises start to use commonalitycomponents and its design as a competitive tool to reduce costs and createadvantage. In stock, the application of component commonality can reduce thenumber of parts need to be managed, and the level of safety stock by therisk-sharing effect. Another the applications of component commonality can reducesystem complexity, reduce installation time, shorten delivery time by shortenproduct development cycles and streamline production process, achievingtime-based competitive advantage. Therefore, focusing on the competitive timefactors, establish inventory model which combines component commonality withtime-based competitive factors, is an effective method of improving the overalloperational efficiency of supply chain. It not only helps further deepen the theory ofcomponent commonality inventory model with time-based competitive factors, butalso in practice for the manufacturers to determine a reasonable inventory levels,the scientific selection of component commonality strategy for decision-makingbasis, build competitive advantage.In a two-stage, two products production system, for the case of singlecomponent commonality and double component commonality in the second stage,the guaranteed delivery time is considered and the first-stage non-component、single-component、 double-component commonality inventory models arerespectively established. The optimal inventory levels of the three models are analyzed. Based on numerical examples the relationship between the cost andbenefits of component commonality is studied. Numerical examples suggest thatwhen (n, m) strategy is adopted for a production system, the more use ofcomponent commonality can not generate the lower total costs. Especially whenthe unit purchase costs of common components higher than non-commoncomponents, commonality strategy often can not play a role in cost saving. Mainlybecause the common components reduce the inventory levels while increasing therisk of shortage, thus increasing the out of stock cost.