Evaluation of optimal ordering method for coupling point production system

A new ordering system aims to prevent running out of stock, to limit replenishment quantities and to keep reasonable stock levels for multiple items. In the lot-size re-order system and the interval re-order system, replenishment intervals or quantities are determined by each system after replenishment items are decided. When both re-order systems run for multiple items, the total replenishment quantity usually exceeds the limited capacity. The problem of limited capacity was solved by production scheduling or supply lead-time delay. We propose an optimal ordering method, to be controlled by the margin stock ratio under limited capacity. The margin stock ratio is defined by the prediction of the out-of-stock situation that is calculated by the available inventory stock and by the demand quantities of the supply lead-time period. After each item is arranged according to the margin stock ratio, replenishment items are determined under the limited capacity. This new method has been successfully applied to a window-frame manufacturing process.