Determining the periodicity and planned lead time in serial-production systems with dependent demand and uncertain lead time

This paper considers a multi period serial production systems for one product and deals with the problem of planned lead-time calculation in a Material Requirement Planning (MRP) environment under probabilistic lead times. It is assumed that lead times for all stages have the same distribution with different parameters. A MRP approach with periodic order quantity (POQ) policy is used for the supply planning of components. The objective is to minimize the sum of fixed ordering, holding and backlogging costs. A mathematical model is suggested and then an optimal planning lead-time, ordering quantity and periodic time are determined.