By Yacob Khojasteh
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Extra resources for Production Control Systems: A Guide to Enhance Performance of Pull Systems
The Base-stock control system uses the idea of a safety stock for finished goods inventory as well as safety buffers between workstations for coordination. 18 2 Production Systems Base-stock control system limits the amount of inventory between each production stage and the demand process. It tries to maintain a certain amount of WIP in each stage. This amount is called the basestock level of each stage. In other words, the basestock level of a production stage determines the maximum planned inventory of the outputs of the stage (Lee and Zipkin 1992).
POQ represents the number of demand periods covered by each order. For example, if POQ is two, then an order will be placed for two periods worth of demand. Part-period balancing (PPB) method is a dynamic approach to balance ordering and holding costs by changing the lot size to reflect requirements of the next lot size in the future. PPB is performed by determining the economic part period (EPP), which is the ratio of setup cost to holding cost. Wagner-Whitin method developed by Wagner and Whitin in 1958 is an algorithm based on dynamic programming principles to make optimal lot size decisions.
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