Random lead times in replenishment planning for single-level assembly systems: The value of information

Abstract Lead times and their variability have a key role to play in multi-component assembly systems, directly impacting their performance. They are rarely known exactly in advance, being generated by various sources of uncertainty. This paper focuses on the stochastic solution of the replenishment planning problem of a single-level assembly system, in the framework of which: (i) procurement decisions must be made before the fixed demands are realized, and (ii) backlogs are authorized. By approaching this problem in the context of stochastic programming, we discuss the value of (stochastic) information for, subsequently, characterizing and better apprehending the grade of stochasticity and its effect on the corresponding solutions.

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