Setting safety lead-times for purchased components in assembly systems: a general solution procedure

In a recent paper, Hopp and Spearman (1993) presented a model to determine optimal lead-times for purchasing components where the only manufacturing operation is the final assembly. It is assumed that delivery times of the different components are normal variates. An approximate iterative solution procedure is presented that facilitates derivation of the optimal lead-times. Based on an approximation for the delivery-time distribution, an alternative solution procedure is proposed that results in closed-form expressions for the decision variables of the problem. Both simplicity and ease of calculation are achieved. Furthermore, the new procedure is extended to non-normal delivery-time distributions. For Hopp and Spearman's numerical examples, the new procedure is shown to yield better accuracy.