Lot size effects on process lead time, lead time demand, and safety stock [An article from: International Journal of Production Economics]

This digital document is a journal article from International Journal of Production Economics, published by Elsevier in . The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
A comprehensive process lot sizing/order point model is developed, in which queuing relationships are used to endogenously model the effects of lot size on the lead time demand distribution. The model is used to examine the effect of shortage penalty on the optimal lot size, when the model reflects job queuing dynamics arising from the lot size decision. A coordinated policy of safety stock adjustment and lead time reduction through lot size adjustment is shown be more efficient than responding to changes in the shortage penalty parameter solely through adjustment of safety stock.