A Simulation Study of Protective WIP Inventory and It's Effect on Throughput and Lead-Time Requirements

This research compared the variables of throughput and lead-time requirements based on the WIP inventory control systems of three different management philosophies through computer simulation. The philosophies were examined in typical assembly line environments and based on WIP inventory control systems of Part buffers and a push system – MRP; Kanbans and a pull system – JIT; Time buffers and a hybrid push-pull system – TOC. The analysis was based on data gathered in three separate simulations that were identical in design except for the WIP inventory control methods and their buffers. In both performance measurements the WIP inventory control methods of the TOC management philosophy exceeded the outcomes of the MRP and JIT models. Inventory, traditionally considered as an asset, over and above the minimal requirements for production, will have a negative effect on the performance measurements.