If there were randomness in lead times and production rates and variation in defect or scrap rates, production and purchasing could be schedules to meet all requirements exactly as needed with safety stocks. The key to adapting to these uncertainties efficiently is to determine which items and processes are most subject to randomness, as well as the types and causes of the variation.
For those items in which variations are prevalent, we want to determine whether the variation is in time or in quantity. If the variations are in the quantity produced. safety stocks can make up for small production short falls and keep the process operating. For regularly produced items, small amounts of safety stock of the end product and/ or strategically selected components can compensate for minor production or procurement shortages and possibly for short time delays.
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