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, J
Wang, S
Cheng, TCE 
Issue Date: Oct-2008
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.
Keywords: Postponement
Economic production quantity (EPQ)
Backorder
Supply chain management (SCM)
Publisher: Pergamon Press
Journal: Omega 
ISSN: 0305-0483
EISSN: 1873-5274
DOI: 10.1016/j.omega.2006.03.002
Rights: Omega © 2006 Elsevier Ltd. The journal web site is located at http://www.sciencedirect.com.
Appears in Collections:Journal/Magazine Article

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