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Optimal purchasing policy in a two-component assembly system with different purchasing contracts for each component

Title
Optimal purchasing policy in a two-component assembly system with different purchasing contracts for each component
Authors
Kim E.Lee K.Kang S.-H.
Ewha Authors
김은갑
SCOPUS Author ID
김은갑scopus
Issue Date
2006
Journal Title
Mathematical Methods of Operations Research
ISSN
1432-2994JCR Link
Citation
vol. 63, no. 2, pp. 301 - 327
Indexed
SCIE; SCOPUS WOS scopus
Abstract
This paper considers an assembly system where a firm produces a single product which is assembled using two types of components (component 1 and component 2). The components are provided by individual suppliers (supplier 1 and supplier 2). We assume that the firm makes different procurement contracts with supplier 1 and supplier 2. To supplier 1, the firm specifies the maximum inventory level of component 1 and makes a commitment to purchase the component as long as its inventory level is below this target level. To supplier 2, the firm has the option of purchasing or rejecting component 2 at each instant supplier 2 provides it. Formulating our model as a Markov decision problem, we identify a component 2 purchasing policy which maximizes the firm's profits subject to the costs of rejecting component 1, holding component 2, and purchasing component 2. We also investigate how the changes in the sales price and cost parameters affect the optimal purchasing policy. Finally, we present numerical study for the optimal performance evaluation.
DOI
10.1007/s00186-005-0004-x
Appears in Collections:
경영대학 > 경영학전공 > Journal papers
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