Strategic safety stock placement in supply chain design with due‐date based demand

We present a strategic safety stock placement model in supply chain design for assembly‐type product with due‐date based demand, where demand data are based on dates when company has to ship to customers rather than order receiving dates. We formulate multi‐echelon stock placement by guaranteed‐service model with demand propagation equations through backward explosion, where demand can be either stationary or nonstationary. The stock placement model is incorporated into network design problem and its optimization procedure is provided. We show effectiveness of the optimization procedure and other significant features of the model through numerical examples of a machinery product supply chain.