Production smoothing and buffer stock reduction for two-stage production and inventory systems

Kazuyoshi Ishii, Shusaku Hiraki

International Journal of Manufacturing Technology and Management, 2000, vol. 1, issue 2/3, 232-240

Abstract: This paper deals with the problem of developing an effective push-type ordering system which can decrease the variations of production ordering and inventory levels, while taking into account forecasted error, the difference between forecasted values and the backlog quantity, in which the shortage of safety stock of component parts causes a discrepancy between production ordering and actual production levels. The ordering system is developed on the basis of an idea which combines safety stock and the weight of the feedback quantity of actual and forecasted term-end inventory levels. Some results of numerical analysis show the effects of safety stock of the component parts and the feedback control parameter of each production stage, the autocorrelation coefficient of product demand upon the amplifications of production ordering and inventory levels.

Keywords: amplification; buffer stock; exponential autocorrelation; feedback control parameter; multi-stage production and inventory system; production smoothing; "push"-type ordering system. (search for similar items in EconPapers)
Date: 2000
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