A Study of the Proper Amount of Work-in-Process Inventory for Multipurpose Intermediate Products

Abstract

It is difficult to calculate the amount of inventory of intermediate products in a material processing factory which has complex multiple processes. If the amount is too great, inventory assets accumulate. On the other hand, if it is too small, tardiness in due-date is caused and the lead time from accepting order to shipping is extended because demand variation and equipment failure cannot be absorbed. In this report we explain a simulation model is explained and results are shown for comparing complementary amount of intermediate products by computing the flow from allocat-ing intermediate products to orders to shipping.