Abstract
ABSTRACT Delayed differentiation is one of the effective ways to cope with the challenge of product proliferation. In this research, we combine make-to-stock and make-to-order strategy to design a production system for delayed differentiation. In Stage 1, the common component is made-to-stock by an assembly line. In Stage 2, the final customization is made-to-order in a job shop environment. Given the service level, we use queueing theory to determine how to set up a proper inventory policy to manage the common component. We also derive approximations of the average inventory and the average customer waiting time. Conditions under which the approximations will be less accurate are discussed. Computer Simulation is used to validate the accuracy of the approximations. Managers can use these approximations to evaluate and configure the system in a timely manner. And the approximations could be the building block of more complex queuing systems.
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