Component allocation in multi-echelon assembly systems with linked substitutes

This research deals with the component allocation in multi-echelon, multi-product assembly systems with linked substitutes. This component allocation problem requires deciding which customer orders to release for assembly in each period, using the currently available and incoming common parts, to minimize the total cost of job earliness, job tardiness, and in-process holding, with the consideration of shop capacity constraints. This class of problems is NP-hard. In this paper, rules for using linked substitutes along with a heuristic are presented to resolve this type of problem. The performance of using linked substitutes is evaluated through extensive computational experiments. Computational experience shows that the added flexibility of using linked substitutes enables planners to operate more efficiently. It is expected that rules for using linked substitutes and the proposed heuristic can be applied in industry to improve current capabilities of managing material flows and the performance of operating assembly systems.