Safety stock determination during production transfer

Paper in proceeding, 2015

The purpose is to identify, through a simulation study, how the size of the extra safety stock needed when transferring production vary with uncertainties introduced by the transfer. The study shows that there is a substantial uncertainty increase during production transfer, related to the uncertainty of time to reach steady state. Learning curve factors have the largest impact, while the effects for the production yield factors are about of half their size, but still considerably large in relation to the regular safety stock. The study contributes by structuring the decision problem and indicating the importance of various uncertainties.