Abstract
This paper considers an optimal policy for an assembly system. In the system, a final product is assembled from two types of parts, each of which is ordered from an external supplier. The final product is in demand. Order lead time, assembly time and demand are assumed to be random. The cost structure consists of the shortage cost for the final product and holding costs for the parts and final products. We deal with the optimal control problem in which the optimal order policy for the parts and the optimal assembly policy for the final product are decided so as to minimize the expected cost. The optimal control problem is formulated as an undiscounted semi-Markov decision process. Numerical results are presented in order to study the influence of parameters such as mean order lead time, demand and costs on the optimal policies.
