The MPS parameterization under lead time uncertainty

Abstract

The supply planning of assembly systems under lead times uncertainty is studied. The used criteria is the sum of the average holding cost for the components, the average backlogging cost for the finished product, and the setup cost. The decision variables are the planned lead times of components and the periodic ordering quantity. A new generalized Newsboy model gives the optimal solution under the assumption that the lead times of the different types of components follow the same distribution probability, and that the holding costs per period of the ordered quantities are the same.