[1] Fei Qingyi, Kong Nan, Zhao Lindu,. Investment decision optimization for delayed productdifferentiation based on queuing theory [J]. Journal of Southeast University (English Edition), 2018, 34 (4): 532-539. [doi:10.3969/j.issn.1003-7985.2018.04.017]

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Investment decision optimization for delayed productdifferentiation based on queuing theory()

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Journal of Southeast University (English Edition)[ISSN:1003-7985/CN:32-1325/N]

Volumn:

34

Issue:

2018 4

Page:

532-539

Research Field:

Economy and Management

Publishing date:

2018-12-20

Info

Title:

Investment decision optimization for delayed productdifferentiation based on queuing theory

Author(s):

Fei Qingyi¹;  Kong Nan²;  Zhao Lindu¹

¹School of Economics and Management, Southeast University, Nanjing 211189, China
²Weldon School of Biomedical Engineering, Purdue University, West Lafayette IN 47907, USA

Keywords:

flexible manufacturing system;  postponement strategy;  order penetration point;  investment process;  matrix geometric method

PACS:

F273

DOI:

10.3969/j.issn.1003-7985.2018.04.017

Abstract:

To balance inventory cost with diverse demand, an optimal investment decision on necessary process improvement for delayed product differentiation is studied. A two-stage flexible manufacturing system is modeled as a continuous time Markov chain. The first production stage manufactures semi-finished products based on a make-to-stock policy. The second production stage customizes semi-finished products from the first production stage on a make-to-order policy. Various performance measures for this flexible manufacturing system are evaluated by using matrix geometric methods. An optimization model to determine the level of investment on process improvement that minimizes the manufacturer’s total cost is established. The results show that, a higher investment level can reduce both the expected customer order fulfillment delay and the expected semi-finished products inventory. When the initial order penetration point is 0.4, the manufacturer’s total cost is reduced by 15.89% through process investment. In addition, the optimal investment level increases with the increase in the unit time cost of customer order fulfillment delay, and decreases with the increase in the product value and the initial order penetration point.

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Memo

Memo:

Biographies: Fei Qingyi(1986—), female, Ph.D. candidate; Zhao Lindu(corresponding author), male, doctor, professor, ldzhao@seu.edu.cn.
Foundation item: The National Natural Science Foundation of China(No.71661147004).
Citation: Fei Qingyi, Kong Nan, Zhao Lindu.Investment decision optimization for delayed product differentiation based on queuing theory[J].Journal of Southeast University(English Edition), 2018, 34(4):532-539.DOI:10.3969/j.issn.1003-7985.2018.04.017.

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