The Effects of Backorder Information and Reduced-Setup Dispatching Under Reorder Point Or Kanban Replenishment

This research considers a single-stage, capacity-constrained workstation with circulating transporters used for replenishment and independent customer demand for completed parts. Characteristics of reorder point versus kanban replenishment are examined. One objective is to determine the usefulness of backorder information for upstream order placement. A second objective is to investigate the benefits of dispatching based on setup time reduction. Performance is measured in terms of inventory counts and the proportion of customer orders filled from stock. The area under tradeoff curves is used to evaluate comparisons statistically. Results show backorder information and setup time reduction both improve performance and that interaction effects are not significant. This indicates that reorder point systems can outperform kanban systems whether or not dispatching based on setup time reduction is used