Product structure complexity and inventory storage capacity on the performance of a multi-level manufacturing system

In today’s competitive environment firms are placing greater emphasis on competitive priorities such as low cost and better customer service levels as measured by on-time deliveries. In a multi-level manufacturing system there are various factors which influence costs and service levels (material quailty, master scheduling methods, product structure design, batch size, and inventory storage capacity, etc.). In this study, the effect of varying product structures, and choice of lot-sizing procedures is examined in inventory storage capacitated environments using cost and service level as performance evaluation criteria. The results show that choice of lot sizing rules and of the level of inventory storage capacity is influenced by product structure complexity. Finally, specific recommendations are given for various manufacturing environments.