A production ordering system for two-item, two-stage, capacity-constraint production and inventory model

This paper proposes an effective production ordering system for two-item, two-stage, capacity-constraint production and inventory systems, which reduces the fluctuations in total work load and inventory levels. The model system developed manufactures two final products whose component parts are a standard one and one with optional specifications chosen by the customer. As a result, simulation shows the influences of the safety stock of the optional component parts, average total work load ratio, and coefficient of variation of demand upon standard deviations of total work load and inventory levels in each stage.