Abstract
Due to globalization, the competitions among companies are keener and keener. To satisfy diverse needs from customers all over the world, companies have to face the challenge of product proliferation. Therefore, how to satisfy customer’s need for customization at a reasonable cost and in a short period of time becomes an important research topic. Delayed differentiation is one of the effective ways to cope with the challenge of product proliferation. In this dissertation, we combine make-to-stock and make-to-order strategy to design a production system for delayed differentiation. In the first stage of the system, the common component is made-to-stock by an assembly line. In the second stage, the final customization is made-to-order in a job shop environment. In this research, given the service level, we use queueing theory to determine the inventory level of common component and to derive approximations of average inventory, average customer waiting time, and average total supply chain cost. Simulation is used to validate the accuracy of the approximations. Based on the mathematic models, we discuss how the degree of delayed differentiation and other system parameters such as balance of first stage workstation, number of workstations, and variation of service time impact the inventory level of common component, average inventory, and average customer waiting time. For example, we find that increasing degree of delayed differentiation will reduce average customer waiting time but increase inventory holding cost. Lastly, we use three examples to explain how to use the results of this dissertation to manage production system for delayed differentiation.