A note on analytic calculation of planned lead times for assembly systems under POQ policy and service level constraint

The problem of MRP offsetting for assembly systems with random component procurement times is considered. POQ policy is used for the case where all components have identical lead time distributions and holding costs. An analytical optimization model is proposed and solved. This model minimizes the sum of the average holding and setup costs for the components while satisfying a desired service level. Compared with known approaches, this is a multi‐period model with no restriction on the number of components. All possible distributions can be used for component lead times. The decision variables are integer; they represent the periodicity and planned lead times for components. The model can be used for initial approximate calculation of safety lead times in many industrial situations. Finally, the advantage of this analytical model is in its simplicity.