Page 425 - Orlicky's Material Requirements Planning
P. 425
CHAPTER 23 Strategic Inventory Positioning 403
Enough iterations of this decision matrix will yield ASR equilibrium. ASR equilibri-
um is a point where there is a general indifference to parent-item lead time and invento-
ry reduction for the investments involved with stocking components. Companies must
be diligent about reapplying this decision matrix because the equation involved can be
extremely dynamic with changes to the relevant inputs in the matrix BOM. Those inputs
include
■ Any change to the manufacturing or purchased lead times of parts
■ Additions and/or deletions of component parts that are shared across a signifi-
cant number of parent parts
■ Significant additions or deletions of parent items
