- March 6, 2013
- Zaragoza Logistics Center, Room 221
In this paper, we study a nested assemble-to-order (ATO) system that produces n products out of n components. Each component is replenished through production in house or order from an outsided supplier with a positive leadtime. Product demands are random and fulfilled by an assembling process with negligible leadtimes. Unsatisfied demand for any product is backlogged. We characterize the economic relationships among product and component capacities in stocks or transit. We reveal that their cohesive relations are not pure substitute, complement nor separable. They are structured and can be characterized by a property never reported in the literature. With the aid of this property we can derive managerial insights to interpret how an increase in a single component pipeline inventory can affect the future performance of the whole network system, and how computation can be facilitated.