Characterising the cost of additive manufacturing: demand volatility and absence of inventory

This paper explores the impact of additive manufacturing (AM) on supply chain cost-effectiveness for products with volatile demand. It specifically assesses how AM adoption affects inventory and stockout costs through an exploratory simulation. The study compares the unit costs of AM with injection moulding (IM) and a combination of both. Results indicate that using AM alongside IM is cost-effective only with high stockout penalties. Without such penalties, IM alone proves to be the most economical option. This research provides insights into strategic production decisions in supply chains with fluctuating demand. [Submitted: 13 December 2023; Accepted: 4 September 2024]