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Need And Determination Of Safety Stocks In Deterministic Universe Due To Lot-Sizing Problem In A Supply Chain Dedicated To Customized Mass Production

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Executive Summary

In a supply chain designed for the production of goods of wide variety, the production schedule creates an ordered list of all the alternate components that will be mounted on a same post of the chain. The supply of these components by the supplier may induce transportation-related constraints. There from systematically follows a time-gap between orders and deliveries. This mechanism, commonly called "Rank-change", may be analyzed with the help of the multinomial distribution associated to these alternate components; only a simulation approach has relevance as of that matter, for an analytic approach is not possible. Such an analysis allows assessing the importance of the need to form safety stocks because of the lot sizing, even though requirements are certain.

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