Optimal Inventory Positioning Method By Coupling Point for Assembly Production Control System

Abstract

In the assembly production control system, inventories are concentrated at the position where supply lead-time and demand lead-time are equal, and inventory and production planning are made at this position. We define this position “Coupling Point”. The Coupling Point is established by demand and supply lead-time changed. Inventory and production planning are made at this new Coupling Point. We evaluate necessary inventories with lot-size reorder system, interval reorder system and multi-stage lot-size reorder system. We also evaluate this method under the demand lead-time variability by simulation. It makes clear that proposed method can decrease the necessary inventories on the demand side of the Coupling Point. This new method has been applied to an electronic device manufacturing process successfully.