On the use of independent base-stock policies in assemble-to-order inventory systems with nonidentical lead times

We consider Independent Base-Stock (IBS) policies in Assemble-to-Order (ATO) inventory systems with a general bill of materials and deterministic nonidentical lead times. The main drawback of IBS policies in this setting is that they keep the inventory position of each component constant without considering the availability of other components with longer lead times. We show that the cost of this deficiency is capped by an upper bound that is proportional to the ratio of the maximum difference of lead times to the shortest lead time when the latter is below a threshold, and to the square root of this ratio otherwise. Our result indicates that IBS policies can remain effective when differences of lead times are dominated by their lengths, and can be asymptotically optimal as lead times increase while their differences grow at slower rates.