Evaluation of optimal ordering method for coupling point production system

The new ordering system aims to prevent running out-of-stock, to limit replenishment quantities and to keep reasonable stock levels for multi-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 multi-items, total replenishment quantity usually exceeds the limited capacity. The problem of the limited capacity was solved by the production scheduling or supply lead-time delay. We propose Optimal Ordering Method (OOM) to be controlled by the margin stock ratio under the limited capacity. Margin stock ratio is defined by the prediction of the out-of-stock situation that is calculated by the available stock of inventory and demand quantities of supply lead-time period. After each item is arranged by 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.