Price-based buffer sizing in assembly systems

Internal transfer pricing mechanism will be applied to the problem of buffer allocation in the context of interfacing an assembly line with multiple parallel production lines. Economic effect of buffer sizing iin assembly will be analyzed by means of internal transfer pricing. New internal transfer pricing scheme will be designed to increase the efficiency of assembly system globally not sub-optimally. This new approach will enhance the economic benefit of production channel between an assembly line and multiple production lines. This study will give the basic idea for the application of internal transfer pricing mechanism in various kinds of manufacturing system to increase economic efficiency globally.