Component Buffer Stocks for Uncertainty in Product Mix

Three approaches to the problem of determining buffer stocks to protect against uncertainty in product mix are presented. Each approach can be adapted to recognise the total cost, rather than the total size of component safety stock. Uncertainty in product mix arises because of forecast errors within the total manufacturing lead time. This may be too short to allow for changes in volume but the creation of component safety stock will permit changes of product mix. Examples of the approaches described are given.