Study of the impact of safety stock placement on shifting bottleneck stages in capacitated supply chains.

Abstract

Uncertainty in a modern supply chain structure originates at the supplier, manufacturing process and the consumer. Different types of products and supply chain structures add to the complexity of managing a supply chain. Safety stock in a supply chain acts like a shock absorber against these uncertainties. Current safety stock models are very effective in tackling strategic level problems, however are inept to understand the relation between the placement of safety stock in a supply chain and tactical level uncertainties. A bottleneck in a supply chain determines the capability of a supply chain. The shifting of stage bottlenecks is tactical level uncertainty. This thesis addresses the impact of placement of safety stock on shifting bottleneck stages. Simulation models establish the effects of varying stock levels on shifting bottleneck stages in capacitated assembly environment.