Friday 29th of March 2024
 

Optimization of Postponed Production Decision in Mass Customization


Yanhong Qin and Danping Xiong

Whether to implement postponed production with higher production cost is puzzled by more manufacturers, and to solve this problem, we set the total cost model considering inventory cost and customer waiting cost in non-postponed production and postponed production respectively. Then, we apply the M/M/1 model in queuing theory to optimize the total cost, and by simulation and sensitivity analysis, we find out some important factors influencing whether to apply postponed production such as customer waiting cost, the product categories, and so on. Besides, if the postponed production is adopted, where is the best CODP (Customer order decoupling point) in the postponed production process, and these research results will provide theoretical support for the manufacturer to locate the CODP point correctly, and help the manufacturer to make decision on implementing postponed strategy.

Keywords: Mass customization, Postponed production, Production cost, CODP

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ABOUT THE AUTHORS

Yanhong Qin
School of Management, Chongqing Jiaotong University Chongqing, 400074, China

Danping Xiong
School of Management, Chongqing Jiaotong University Chongqing, 400074, China


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