Designing of a components-oriented ordering system

This paper considers a multistage production-inventory system for use by an automobile manufacturer, and proposes a components-oriented ordering system based on the concept of a just-in-time production system which can respond quickly to a wide range of customer needs and, in turn, shorten production lead times. The following subjects are investigated: (1) Vlassifying the parts fabricated at the machining processes into three classes, i.e., standard, optional and combinational parts, a pull type components-oriented ordering model is formulated, (2) the distribution properties of ordering and inventory quantities at each stage and stock point are clarified, and (3) a procedure for determining adequate buffer stock levels for the machined parts, which assures system reliability for a given performance level, is proposed.