ABSTRACT
The Theory of Constraints (TOC) Distribution and Replenishment Model argues that the majority of the inventory should be held at a higher level in the distribution system and not at the lowest level. The TOC Distribution and Replenishment Model argue that the use of minimum/maximum amounts should be abolished. When the TOC Distribution and Replenishment Model is used to manage the supply chain there is always sufficient parts inventory to continue production work. Perhaps the best way to explain the TOC Distribution and Replenishment Model is with an easy example. The distinct contrast in results between simulated data runs using Minimum/Maximum supply system and the TOC Distribution and Replenishment Model are undeniable. For many companies, the supply chain/inventory system of choice is one often referred to as the Minimum/Maximum system. The concepts and methodologies of the TOC Distribution and Replenishment Model can positively impact the ability to produce products on time and in the correct quantity.
