Abstract for: Simulation based Analysis of Service Levels in Stable Production-Inventory Systems

The performance analysis of a general production–inventory control system under uncertain demand is presented. In the model, the production order releases are determined based on the information feedback on the forecasted demand, work-in-process discrepancy and inventory discrepancy. Stability conditions are obtained in terms of the control parameters that manage the rate at which the above discrepancies are corrected. The service and cost performances of the system in terms of order fill rate, item fill rate and average system cost are analyzed for various values of the control parameters within the stability region. Additional safety stock is considered to help achieve a desired level of service (desired order fill rate). Results based on numerical simulations are presented and their implications are discussed.