Patent ID: 6970841

Claim:
A computer implemented process of managing manufacturing logistics of configure-to-order end products comprising the steps of: a) initializing a process of managing manufacturing logistics of configure-to-order end products by setting x i :=0 for each iÎµS, setting r mi :=P(X mi >0), setting Î² m :=0 for each mÎµM, and setting Î²:=0, where S is a set of components indexed by i, M is a set of end products indexed by m, x i is a probability of no-stockout of a component of index i, r mi is a probability that a positive number of units of component i is used in the assembly of an end product indexed by m, Î² m is a probability of stockout of an end product of index m, and Î² is an upper limit on the stockout probability over all end products; b) setting a set of active components to A:={ }; c) considering each iÎµS, followed by considering each end product m that uses component i in its bill-of-material; d) setting Î² m :=Î² m +r mi Î”, for all m such that iÎµS m where Î” is a unit step size; e) computing the a difference Î´ i :=max m {Î² m }âˆ’Î²; f) determining if Î´ i â‰¦0, and if so, then adding component index i to the set of active components, A:=A+{i}; g) determining if the set of active components is non-empty, and if so, then setting B:=A, otherwise setting B:=S where B is a set of component indexes; h) finding i*:=arg max iÎµB {âˆ’c i Ïƒ i /r mi gâ€²(x i +Î”/2)}, where âˆ’gâ€²(â—) follows the equation - g â€² â¡ ( x ) = - Î¦ â¡ ( Î¦ _ - 1 â¡ ( x ) ) Â· - 1 Ï• â¡ ( Î¦ _ - 1 â¡ ( x ) ) = 1 - x Ï• â¡ ( Î¦ _ - 1 â¡ ( x ) ) , where Î¦(.) is a probability distribution function of the standard normal variate, and Ï†(.) is a probability density function of the standard normal variate; i) setting x i *:=x i *+Î” to update the probability of no-stockout of component i*; j) computing Î²:=max mÎµM Î² m , and checking whether inequality âˆ‘ i âˆˆ S â¢ â¢ c i â¢ â¢ Ïƒ i â¢ â¢ g â¢ â¢ ( x i ) â‰¤ Î² , where B is the budget limit on the expected overall inventory cost, is satisfied and if so, stop and replenish components identified by said set B from suppliers following a base-stock policy that minimizes a total cost of inventory of said components i, wherein said cost c i of at least one component differs from said cost c i of at least one other component; k) otherwise, updating Î² m and for each mÎµM i* , set Î² m :=Î² m +r mi Î”, and going to step b).