The impact of component commonality on composite assembly policies

Assemble in Advance (AIA) policy reduces assembly cost due to advance planning, while Assemble to Order (ATO) policy eliminates assembly of excessive (more than demanded) units. The tradeoffs between the two policies have been studied in the past for single product environments. Moreover, it was shown that it is beneficial to employ AIA and ATO simultaneously. In this article, we study the employment of such a composite assembly policy in a multiproduct environment with component commonality. When common components are used, ATO may also enable us to benefit from the risk pooling effect. We provide important managerial insights such as: the multiperiod problem is myopic and changes in inventory levels due to the use of common components, and demonstrate the potential profit increase compared to other policies.© 2007 Wiley Periodicals, Inc. Naval Research Logistics, 2007     

A sequential partial information bomber-defender shooting problem

A bomber carrying homogenous weapons sequentially engages ground targets capable of retaliation. Upon reaching a target, the bomber may fire a weapon at it. If the target survives the direct fire, it can either return fire or choose to hold fire (play dead). If the former occurs, the bomber is immediately made aware that the target is alive. If no return fire is seen, the true status of the target is unknown to the bomber. After the current engagement, the bomber, if still alive, can either re-engage the same target or move on to the next target in the sequence. The bomber seeks to maximize the expected cumulative damage it can inflict on the targets. We solve the perfect and partial information problems, where a target always fires back and sometimes fires back respectively using stochastic dynamic programming. The perfect information scenario yields an appealing threshold based bombing policy. Indeed, the marginal future reward is the threshold at which the control policy switches and furthermore, the threshold is monotonic decreasing with the number of weapons left with the bomber and monotonic nondecreasing with the number of targets left in the mission. For the partial information scenario, we show via a counterexample that the marginal future reward is not the threshold at which the control switches. In light of the negative result, we provide an appealing threshold based heuristic instead. Finally, we address the partial information game, where the target can choose to fire back and establish the Nash equilibrium strategies for a representative two target scenario.     

Flexible supply contracts for short life‐cycle goods: The buyer's perspective

In this paper we analyze a two‐period supply contract which allows for order adjustment by the buyer. The buyer is required to place orders for two periods. After observing initial demand, the buyer is then allowed to adjust the second order, paying a per unit order adjustment penalty. We describe the optimal behavior of the buyer under such a contract, both in determining the initial order quantities and in subsequently adjusting the order. We compare the solution to a contract where no adjustment is allowed and to the case where adjustment is allowed without penalty. We demonstrate that flexible contracts can reduce the potentially negative effect of correlation of demand between two periods. Further, we investigate how the duration of the first period vis‐à‐vis the second period affects the profitability of the buyer as a function of the degree of correlation. © 2002 John Wiley & Sons, Inc. Naval Research Logistics, 49: 25–45, 2002; DOI 10.1002/nav.10002     

Single-period inventory models with demand uncertainty and quantity discounts: Behavioral implications and a new solution procedure

Quantity discounts are considered in the context of the single-period inventory model known as “the newsboy problem.” It is argued that the behavioral implications of the all-units discount schedule are more complex and interesting than the literature has suggested. Consideration of this behavior and the use of marginal analysis lead to a new method for solving this problem that is both conceptually simpler and more efficient than the traditional approach. This marginal-cost solution procedure is described graphically, an algorithm is presented, and an example is used to demonstrate that this solution procedure can be extended easily to handle complex discount schedules, such as some combined (simultaneously applied) purchasing and transportation cost discount schedules.