A survey on selection of supply strategies in material requirements planning based on the assessments of safety stock levels

Annual Reviews in Control. 2026. No. 62. P. 1–15.

Lukinskiy V., Lukinsky V., Sokolov B., Bazhina D.

Enterprises planning material requirements must account for multiple sources of uncertainty. Considering the impact of yield uncertainty is of prime importance to decision-makers. To mitigate the effects of random yield on the continuity of manufacturing operations, we propose establishing a reserve stock to prevent shortages due to defective items within safety stock levels. If no reserve stock is established, this implies that the safety stock is composed exclusively of perfect, defect-free units. In this paper, we propose an analytical approach to assessing the reserve stock level based on safety stock calculations under variable probability of non-defectiveness. By explicitly accounting for failures in both planned deliveries and safety stock, we propose a three-tier framework for the potential application of a combined safety and reserve stock policy. The paper formulates a multi-criteria approach to evaluating supply strategies. It develops a flowchart for selecting a supply strategy in material re quirements planning, accounting for ordering costs and the holding costs of safety and reserve stocks under random yields. The proposed approach allows the consolidation of demands across multiple periods into a single delivery at minimum cost, incorporating a probabilistic assessment of safety and reserve stock levels to achieve the required shortage-free service level.

Keywords: Random yield, Defective items, Material requirements planning, Combined safety stock