Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/649
Title: Analysis of postponement strategy by EPQ-based models with planned backorders
Authors: Li, Jian
Wang, Shouyang
Cheng, T. C. Edwin
Subjects: Postponement
Economic production quantity (EPQ)
Backorder
Supply chain management (SCM)
Issue Date: Oct-2008
Publisher: Elsevier Ltd.
Source: Omega, Oct. 2008, v. 36, no. 5, p. 777-788.
Abstract: This paper develops economic production quantity (EPQ)-based models with planned backorders to evaluate the impact of the postponement strategy on a manufacturer in a supply chain. We derive the optimal total average costs per unit time for producing and keeping n end-products in a postponement system and a non-postponement system, respectively. By comparing the optimal total average costs of the two systems, we evaluate the impact of postponement on the manufacturer under four circumstances. Our results show that postponement strategy can give a lower total average cost under certain circumstances. We also find that the key factors in postponement decisions are the variance of the machine utilization rates and the variance of the backorder costs.
Rights: Omega © 2006 Elsevier Ltd. The journal web site is located at http://www.sciencedirect.com.
Type: Journal/Magazine Article
URI: http://hdl.handle.net/10397/649
DOI: 10.1016/j.omega.2006.03.002
ISSN: 0305-0483
Appears in Collections:LMS Journal/Magazine Articles

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