Abstract
Traditionally, the issue of safety stock is often discussed under independent demand, and is rarely considered under dependent demand in MRP. In the development of SCM, the safety stock in MRP becomes important, but there is little literature on the subject. This study presents an MRP-inventory simulator for Company A, and develops an effective method for initially setting of safety stock at the part-item level. In this method, it is assumed that the delivery leadtime is constant, but safety coefficients are viable. Then, the stock-out rate under constant inventory cost is compared to the same case with the ranking of safety coefficients for parts. It is concluded that a differentiation in safety coefficients is considerably the better strategy for independent demand, and the method for setting of safety stock in SCM/MRP is further improvable. In addition, it is found that the purchasing cost has a minimum with respect to the optimal safety coefficient, and the stock-out rate has the optimal safety coefficient given by the Yoko-U shape.
