Component commonality in assemble-to-order systems: Models and properties

Abstract

This article presents a general multiperiod model of an assemble-to-order system with component commonality and proves that its solution is myopic. The model is then endowed with a capacity or storage constraint, and the resulting behavior of optimal policies is investigated. Interestingly, with such constraint, the optimal stocks of product-specific components can be lower in an assemble-to-order system than in a corresponding make-to-stock one, a behavior that is impossible in an unconstrained model.