Performance analysis of a Configured to Order business with a variable product configuration recipe

Abstract

We study a complex Configured to Order (CTO) business operating under variable product configuration recipes and high component commonality within product Bills of Materials. In particular, we conduct a series of simulation experiments to compare certain supply chain designs and investigate how their performance changes with changing variability of product configurations. The results indicate that under higher variability and component commonality conditions, a supply chain design that lays more emphasis on tracking the evolution of component demands and inventory positions performs better.