Managing the supply and demand uncertainty in assembly systems

Abstract

To react to changing market rapidly, some companies outsource all components, and then assemble them into end product to fulfill customer demand. For such assembly systems, the marketing environment at both supply and demand sides is quite volatile. So, agility is one of the key factors for them to win the competition. In this paper, a simulation model is built for an assembly system, in which both supply and demand uncertainties are considered. Then, by this model, the effect of supply and demand uncertainty on the performance of the system is studied, and the approach on how to manage such uncertainties is provided. To achieve agility, managers of the assembly systems can utilize such results to adjust their assembly schedule to adapt to the different levels of supply and demand uncertainty. © 2006 International Federation for Information Processing.