Superiority of collaborative replenishment with supply-hub in assembly system

Supply replenishment mode between suppliers and the manufacturer is considered in upstream assembly system. Furthermore, collaborative replenishment mode in assembly system is analyzed based on supply-hub. To illustrate superiority of the supply-hub, the other two replenishment modes, called traditional lot-for-lot mode and modified lot-for-lot mode with "milk run", are introduced. The optimal decision-making is analyzed in these three different replenishment modes. Finally, numerical simulations are conducted and the total cost is compared with these three replenishment mode, which indicates the significance and superiority of replenishment mode with supply-hub in assembly system.