Designing a pull-type parts procurement system for international co-operative knockdown production systems

In this paper, a conceptual framework for designing a parts procurement system for international co-operative knockdown production systems is proposed. Two types of pull-type parts procurement models that contain both a backorder function which modifies the backlog carried over from the last period and emergency delivery compensating for component part shortages, are formulated, and the effects of emergency delivery on the probability of stock out and the mean value of shortage quantity is analysed. Using these results, a computational procedure for determining an economic buffer stock level and emergency delivery rate or level which assures system reliability for a given performance level and minimizes the sum of inventory and emergency procurement costs, is presented.