A Stochastic Model for a Delayed Product Customization

Document Type

Article

Publication Date

2013

Publication Title

IAPQR Transactions

Abstract

Postponement, also known as delayed differentiation, is a strategy used by some firms in supply chain to delay the differentiation of a product until a latest possible point closer to consumption (via demands for the product) as a way to compromise between a complete push system and a complete pull system. The study herein extends Lee and Tang’s framework for mass customization of products in three different ways. First, the components coming from the supply side are incorporated in the framework to account for a possible supply risk. Secondly, we consider a push-pull system in which common tasks to manufacture two types of products are performed first up to a pre-determined differentiation point, and arriving demands will trigger the production process to begin making the final products based on individual customization. Thirdly, we model the demands to occur according to a Markovian arrival process (MAP), a versatile point process very useful in practice. We employ simulation to bring out the qualitative nature of the model under study through illustrative examples.

First Page

1

Last Page

15

ISSN

0970-0102

Rights

© 2013 IAPQR Transactions

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