Managing Uncertainty in Multilevel Manufacturing Systems

The effectiveness of alternative buffering strategies in complex multilevel assembly manufacturing systems using the Material Requirement Planning (MRP) methodology is explored and assessed. The safety stock, safety lead time, “hard” safety capacity, and forecast inflation buffering strategies are tested under uncertainties of end‐item demand, resource supply, and task control. The MRP methodology is applied for scheduling along with a complex, realistic simulation model for execution of operations. Average inventory levels for end and component items, capacity utilisation, end‐item backorders and customer undersupport are used as performance measures. Experimental results establish safety stock and “hard” safety capacity as dominant buffering strategies under all uncertainty conditions, and task control is shown as the most disruptive uncertainty source.