An analytical comparison of inventory costs between the pull and the parts-oriented production systems

This paper presents nomographs for evaluating the relative size of parts inventory costs yielded by the pull system and the parts-oriented system for the multi-stage production. The parts-oriented system indicates the less inventory costs under the larger variation of parts demand, the larger production stages and the higher safety stock level. The merit of pull system increases as the variation of parts demand and the safety stock level decreases, respectively, which have been treated as management goals of Toyota Production System (a typical example of the pull system).