We study the value of component commonality in assemble-to-order systems under no-holdback allocation rules. We prove that the total product backorder and on-hand component inventory decrease with probability one as the degree of commonality increases; however, the average cost may not decrease unless a certain cost symmetric condition is imposed.
All Science Journal Classification (ASJC) codes
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Applied Mathematics
- ATO system
- Component commonality
- No-holdback allocation rule