Safety Stocks in Capacity-constrained Production Systems

We present a simple calculation scheme for the determination of safety stocks for a capacitated single-stage multi-product production-inventory system. Demand is assumed to be stochastic and a given fill rate has to be fulfilled. The lotsizing and sequencing decisions are made on a rolling horizon basis considering sequence-dependent setup cost and time. Results from a simulation experiment show the reliability of the approach under varying parameter settings.

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