Designing a Dynamic Model for Selecting Appropriate Scenario of Safety Stock Level in Mrp System Case Study: Mashhad Panel Barsava Manufacturing Company

A Production system with push control system uses materials requirements planning (MRP) to plan purchasing and manufacturing physical resources. Therefore a material planning system provides a basis for scheduling production and purchasing materials. Firms are looking for a way to deal with fluctuations causes by environmental uncertainty, which include fluctuations in demand and supply of raw materials. Using safety stock which is a certain amount of goods or materials kept as inventory to deal with uncertainty is one way to deal with fluctuation issue. Despite the safety stock importance, there is no comprehensive framework for decision making about this issue. The aim of this paper is to provide a dynamic model for MRP system. By applying this model, a suitable policy of safety stock is achieved. Then, the appropriate amount of safety stock can be obtained and total inventory cost can be reduced. A system dynamics approach is used to simulate the model and demand and lead time are considered probabilistic. After designing the model, different scenarios of safety stock have been proposed. Used criteria for selecting an appropriate scenario is total inventory cost, and finally a scenario in which the total inventory cost is at its lowest amount would be chosen as the best scenario.