Inventory metrics for lead time focused manufacturing

This research develops and applies utilization based metrics for inventory systems. Simulation and queuing model results demonstrate that utilization metrics can achieve same objectives as cost based inventory policies. The utilization based inventory control is simpler to implement than cost based models. The computational experiments develop a rule of thumb for dynamic control of inventory. This rule of thumb is to set inventory utilization to 10% less than the bottleneck manufacturing machine or process for manufacturing systems with limited variability and a bottleneck. Simulation results that indicate dynamic control of inventory with rules based on utilization metrics are effective.;This research also demonstrates utilization of inventory metrics is an effective tool to monitor system performance. When inventory utilization is very low, the system has excessive inventory for a particular part. When utilization is high, lack of inventory tends to generate long lead times.