Optimal stock - out risk for a component mounted on several assembly lines in the case of emergency supplies

This article examines the optimal stock-out risk for a component used by alternative modules mounted on several assembly lines. The studied context is a supply chain dedicated to the mass production of highly diversified products, which is common in the automotive industry. The material requirement planning (MRP) approach is adapted to monitor this chain; however, the distance between the production units leads to a mix between production to stock and production to order for the component of interest. To prevent stock-out propagation along the downstream part of the supply chain, the requirement for an emergency supply is triggered prior to the latter’s occurrence. The definition of the optimal safety stock and its associated optimal stock-out risk are based on a mono-period model that considers the cost of a safety stock and the costs incurred by the emergency supply (transportation and production). The analytical solutions dependent on these costs are illustrated.