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- Title
COMPONENT COMMONALITY WITH SERVICE LEVEL REQUIREMENTS.
- Authors
Gerchak, Yigal; Magazine, Michael J.; Gamble, A. Bruce
- Abstract
This paper extends recent results of Baker et al. (1986) in understanding the impact of component commonality on stocking levels under service level constraints. A model is formulated for an arbitrary number of products with general joint demand distribution. The results obtained are not all intuitive. While utilizing commonality is beneficial, nothing general can be said about the resulting change in the components' stock levels. When the cost structure is of a particular simple form, though, some interesting general patterns do emerge. We also discuss the case of using a service-level measure where rationing of common components might be required, and characterize the implied rationing rule.
- Subjects
INVENTORIES; BUSINESS planning; RATIONING; MANAGEMENT science; PRODUCTION management (Manufacturing); INVENTORY control; ORGANIZATIONAL effectiveness; STOCHASTIC models; INDUSTRIAL procurement; MATHEMATICAL models
- Publication
Management Science, 1988, Vol 34, Issue 6, p753
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.34.6.753