A Study of the Method to Improve On-Time Delivery Rate Based on Safety Stock Strategy
Jiang Ai-ping
Gao Jun-jun
Abstract：To meet the requirements of clients , dealers producing non-core parts of computers frequently depend on vast inventories or overtime production , which has presented a problem from potential uncertain-ties in the supply chains of computer production .Furthermore, the on-time delivery rate (ODR) inevitably ascends when the dealers for non-core parts are out of stock .To decrease uncertainties of the supply chain for computers parts production , an innovative method is proposed to improve on-time delivery rate, based on the safety stock (SS) strategy.Firstly, with the consideration of imaginable certainties and uncertain-ties, the demand of new computers is calculated for the optimal safety stock factor by means of mathemati -cal deduction .Then, the quantity of safety stock is available with the safety stock factor and the demand for computers.If the demand for computers is lower than the quantity of safety stock , the demand can be immediately met , or additional parts of computers should be produced by the suppliers before the delivery . Eventually , an annual average stock formula is demonstrated considering the uncertainty in demand estima -tion.In an empirical analysis , comparing with MTO ( make-to-order ) method, the new method can in-crease stock turnover velocity five or six times higher than in the past .Additionally , the unit inventory car-rying cost will reduce by 14%and the on-time delivery rate increase by approximately 80%.
Keywords：safety stockinventory carrying costmiddlemanon-time delivery rate
Publication Date：2014-01-01
Online Publishing Date：2025-08-15(First online date of this platform, not the publication date of the document)
Pages：7( 80-86 )