Optimization of Reorder Point Strategy of Assembly Manufacturer with Random Variables

For assembly system, randomness and variableness make it impossible to control the inventory accurately specially. Because the negative effect of them have ripple effects. So we investigate reorder point optimization strategy of assembly manufacturing system with random demand and random lead time. We seek the manufacturers order strategy for the minimum integration of the supply chain inventory cost. And we use scale benefits parameters of suppliers in this system to reflect actual influence of the lot’s scale. Numerical example of two components assembly system is given to illustrate the effectiveness of the reorder point strategy. From the numerical simulation, it is can be seen backorder rate and order scale effect will impact the total supply chain cost dramatically.