Issues in inventory control models with demand and supply uncertainty Thesis proposal
|
|
- Denis Wright
- 7 years ago
- Views:
Transcription
1 Issues in inventory control models with demand and supply uncertainty Thesis proposal Abhijit B. Bendre August 8, 2008 CORAL Centre for Operations Research Applications in Logistics Dept. of Business Studies, Aarhus School of Business, University of Aarhus Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark Introduction: If we observe closely, inventories can be found everywhere. We don t know since when ants and squirrels are keeping inventories of their food supplies. And we don t know how they learned to keep an account of these inventories. Not only wildlife but also humans have been smart enough to realize the benefits of inventories. Since stone-ages we have been carrying inventories and managing them. But, the development of modern inventory management principles began when Harris (1913) derived the Economic Order Quantity (EOQ) formula. EOQ assumes that demand occurs at known, constant rate and supply fulfills the replenishment order after a fixed lead time. Unfortunately, the real world is not as ideal as that. In reality, demand rate is rarely constant; hard-to-predict market is common in most practical situations. Also, unpredictable events in supply systems can cause unpredictable delays in replenishments. Moreover, in current times when outsourcing is at the centre stage, complex and longer supply chains magnify the length and variability of lead times (Welborn, 2008). Although in the early days researchers acknowledged the necessity for considering uncertainties present in the real world, the rigorous work on inventory control models with stochastic features really began in 1950s. The classic book by Hadley and Whitin (1963), comprehends the research work done in this field to that date. This fundamental research done in those early days has had a pivotal effect on the subsequent developments in the field of inventory theory. An article by Lee (2002) presents the uncertainty framework, which considers dimensions of demand and supply uncertainties. This framework can be a simple but powerful way to characterize a product; which can be useful in devising an appropriate supply chain strategy for that product. Uncertainties in demand and supply can result in excessive inventories and deteriorated customer service, indicating out of control supply chain. In the presence of uncertainties, it is difficult to foresee the final effects of the actions taken and hence to manage the inventories efficiently. In general, it is observed that stochastic lead times and demand have their greatest impact in combination (Zipkin, 2000). In this era of outsourcing and/or offshoring longer lead times are common, especially because the transportation time might be considerable. Usually, long lead times and uncertain demand hamper the performance of inventory control systems. Also, there are hardly any supply processes which have completely avoided the issues of limited capacity and unpredictable quality. These issues have even more pronounced effects in the presence of stochastic lead times. Hence, considering further stochastic features in inventory control models will bring our study closer to practical problems. 1 of 7
2 In inventory systems with stochastic elements, it is important to consider the effect of shortages and to trade off the cost of shortages against the cost of holding inventory. One way of dealing with shortages can be through backordering, where demand is backlogged if can not be satisfied immediately from the inventory. Lost sales represent another way in which shortages might result. Lost sales might be interpreted as a definite loss of a sales opportunity, and the case where the demand cannot be satisfied by the inventory system considered, but is eventually satisfied outside this system, e.g. by using expedited ordering or special supplies. The study by Corsten and Gruen (2004) shows that, in retail industry almost half of the cases of shortages result in lost sales. Lost sales also appear to be a typical mechanism for handling shortages in some spare parts industries. So far in inventory theory tremendous work has been done on policies with backorders. More sparsely studied is the case of lost sales. One reason is that fundamental results from the backorder case do not hold for the lost sales case, which makes the latter much more complicated to model exactly. Hence, it would be reasonable to say that with expanding retail and spare parts industries, the lost-sales case deserves more attention in research studies. We mainly consider single-item inventory systems. However, these systems may also be found embedded as building blocks in larger systems with multiple items and/or multi-echelon structures, commonly known as supply chains. We hope that our understanding of the smaller systems can be further exploited when studying more complicated supply networks. In this context, this PhD thesis focuses on studying a few of the particular problems concerning inventory control models with demand and/or supply uncertainty. The thesis is designed to consist of a collection of 4 or 5 papers. Although all problem statements are motivated by the above mentioned practical issues, not all of them are explicitly linked to each other. Hence, each paper is based on a separate research question of itself. The next section presents each project briefly as subprojects A-E, each with its problem specification, methodology, expected results, and if the project is already in progress, then also its current status. Description of subprojects: A. Base-stock policies for the lost-sales case under exogenous and endogenous, sequential supply systems. It is a challenge for any inventory policy to manage ubiquitous uncertain demand as well as supply with uncertain lead times, while achieving acceptable service levels at minimum total costs and it is particularly difficult for the lost-sales case. Hence, the purpose of this study is to obtain a better understanding of the performance of widely used base-stock policy for the lost-sales case under different stochastic leadtime regimes. The base-stock policy is sometimes also referred to as an (S-1, S) system with S-1 corresponding to a reorder point and S being the order-up-to level. In this subproject, we first classify different lead-time regimes. The matrix in Figure 1 aptly presents the classification of lead-time regimes under uncertainty. Then for this paper we focus on endogenous and exogenous regimes and specifically consider dependent sequential lead times (models IV and VI). 2 of 7
3 Lead-time crossover Sequential lead times (No lead-time crossover) Independent Dependent Independent Dependent Exogenous I II III IV supply system Endogenous (- - -) V (- - -) VI supply system Figure 1. Classification of lead-time regimes under uncertainty We consider a single-item inventory model managed by a continuously reviewed base-stock policy. Demand is Poisson and lead times are stochastically dependent under the realistic assumption that they are sequential. Also, we draw service times (for endogenous supply system) and quoted lead times (for exogenous supply system) from a Gamma(1/μ, r) distribution. These systems are modelled using discrete event simulation. During the experiments we adjust 1/μ and r to change the average lead time of the supply system and induce variability in service times and the quoted lead times. We run these experiments for a range of base-stock levels. For each experimental scenario, we observe effective lead-time characteristics and also study the effects on fill rate, average inventory and long-run average cost performance of the inventory system. The findings from our work so far indicate that, in the presence of lost sales an exogenous supply system is more effective than an endogenous system, especially in case of long lead times and high base-stock levels. Also, for an exogenous sequential supply system an interesting and subtle behaviour of average lead time was noticed for higher stock-out frequencies. We observed that average lead time decreases with increasing stock-out frequency. In the future it could be of interest to model sequential supply systems with other mechanisms than the one employed in this study. For such systems it could then be of particular interest to check for the leadtime decrease observed here for high stock-out frequencies. Moreover, it could be interesting to analyse the characteristics of realized lead times under a wider range of experimental scenarios. Further research could also involve analytical models for comparing the lead-time regimes considered in this paper. B. Base-stock policies for the lost-sales case under sequential and non-sequential supply systems. The subproject for this paper is inspired by the classification of lead-time regimes, presented in Figure 1. In reference to this figure, we plan to compare performance of the base-stock policy for models II vs. IV and models V vs. VI. Hence, we compare the performance of exogenous supply systems, which have sequential and nonsequential lead times. We also plan to conduct the same kind of comparison for endogenous supply systems. For this subproject we restrict our focus to dependent lead times and postpone work on independent lead times for future. In the literature, there is an ongoing debate on whether lead times with crossovers or sequential lead times represent the most realistic characteristic of real-life inventory systems under supply uncertainty. In practice both order crossovers and sequential 3 of 7
4 lead times can be found in different business settings. As discussed by Riezebos (2006), order crossovers are usually observed when there are multiple suppliers and it is most typical for the sole supplier to provide a sequential supply system. Hence, this study might help in understanding the implications of decisions regarding single and multiple suppliers, on the characteristics of replenishment lead times and performance of inventory systems. Two of the models for sequential lead times will be similar to those in Paper A, while new models have to be built for capturing the exact characteristics of order crossovers. In this subproject we intend to follow a hybrid approach, where both analytical and simulation models will be employed. For drawing conclusions from this study, we intend to study the effects of above mentioned regimes on lead-time characteristics and inventory performance measures such as fill rate and average inventory. C. Evaluation of performance approximations for (r, q) inventory policies in a lost-sales setting. The (r, q) inventory policy, in which the replenishment quantity q is ordered when the inventory position reaches the reorder point r, is one of the most widely practiced control policies for single-stage, single-item inventory systems. This policy has been thoroughly studied when demand is backordered, whereas more sparsely studied is the case of lost sales. We start our study by building a framework for studying models with lost sales and (r, q) policies. Also, we plot the (r, q) decision space for the case of lost sales, which helps in pin-pointing focus of this paper. The study of this decision space reveals the fact that no exact closed-form expressions are available for (r, 1 < q < r) inventory system, where more than one order might be outstanding. The purpose of this paper is to investigate the performance of an inventory system with lost sales controlled by the (r, q) policy under constant lead times and when several orders might be outstanding at a time. Demand is Poisson and lead times are assumed to be constant. In particular, we focus on long-run average performance of the fill rate, the inventory level and the ordering frequency. Although the system might appear simple, it is in fact well known to be rather difficult to model exactly. Until quite recently, no exact results have been available, except for some special cases. The exact results that are presented by Johansen and Thorstenson (2004) do not include closed-form expressions, but require rather elaborate computations. Hence, for practical applications there is still a need for simple approximations and to investigate their behaviour under different parameter settings. The results from our work so far, indicate that simple approximations suggested in the literature (Zipkin, 2000) can induce significant errors in the estimates of inventory performance. We evaluate the approximations by comparisons to results obtained from simulations and thus find that refinements are required. An appropriate choice of approximation may simplify the performance evaluation and be of use in guiding policy decisions of the inventory control system under consideration. As a first step towards developing such refined approximations, in a simulation study we test which distributions give the best fit to the simulated inventory position and inventory levels respectively. We conjecture that the knowledge obtained regarding 4 of 7
5 the representation of the inventory position, will be useful in developing improved simple approximations. In the future, we plan to extend the numerical experiments and analyses to complete the study and to test further parameter settings. Also, further processing and analysis of collected inventory level information can provide further insight in the inventory performance. This insight may enable us to formulate other simple approximations for performance measures. An interesting extension would be to investigate the problem setting when there is also supply uncertainty, for example stochastic lead times. D. Lost-sales case and base-stock policy with information about supply condition. During the last decade, flexible supply chains have attracted tremendous attention. In this era of globalisation, firms are serving a wide spectrum of market environments with diverse and uncertain demand patterns. The retail sector has always been in the trenches facing these diverse demands with low forecast accuracy, and at the same time trying to avoid lost sales while keeping the inventory levels low. Fisher (1997) presents the effect of such demand patterns on the retail sector and the significance of flexible supply chains for running an efficient business in such a market environment. One of the virtues of flexible supply chains, which have always been taken for granted, is the market responsive supply system. As discussed in Song et al. (1996), the supply condition responsive replenishment ordering systems can also contribute a great deal in achieving cost efficient flexibility in supply chains. Das and Abdel-Malek (2003) argue that in order to achieve such a responsive ordering system, suppliers also need to accommodate flexible order sizes. In Song et al. (1996) an inventory control model with backorders is presented, which includes a supply system that evolves over time, as do the replenishment lead times. Due to shared supply information, parameters of the inventory control model changes according to current supply conditions. The purpose of this subproject is to formulate a similar inventory model for the case of lost sales. In this subproject, we plan to focus on base-stock type policies. We assume that the supply system is exogenous and that it processes orders sequentially. Depending on the complexity of the problem and the availability of time, we hope to consider stochastic demand as well. As suggested by Song and Zipkin (1996), Markov decision processes can be an efficient way to model this problem. Obviously, as many fundamental relations from the backorder case do not apply in the case of lost sales, actual modelling of the problem could become quite complicated. As a result we hope to formulate a model, from which it is possible to compute a base-stock type of policy that gives the lowest average total cost. E. Flexible transportation options An article in Harvard Business Review by a senior vice president with the Boston Consulting Group (Stalk, 2006) rightly discusses the issue that when supplies are outsourced to suppliers situated halfway around the world, biggest concern is the long transportation times. These lengthier transportation routes have greater risk of disruptions and hence uncertainty. Obviously, such transportation times result in 5 of 7
6 longer and more uncertain order replenishment lead times. This can seriously affect the business performance by not only elevating the average inventory-in-transit level, but also by deteriorating the service levels when the delivery promises are not kept. Hence, flexible transportation may facilitate the optimization of total cost for outsourcing. To squeeze transportation time whenever it is necessary, Stalk (2006) also recognizes the need for appropriate selection of transportation options at the correct point of transit. Hence, it might be of great practical significance to formulate a formal model which helps in identifying an appropriate transportation option at each transit point. Basically we need to develop a model, which keeps track of an order and finds the best possible transportation alternative based on the information available about the current status of an order. This model should find best possible set of transportation alternatives, which can trade off inventory carrying and transportation costs with shortage cost and result in least possible total cost. This research idea is still in its infancy; hence at this stage we can not exactly identify the solution method for this problem. The order is going through the transition of states during transportation and decisions have to be made based on these states. So, we recon that Markov Decision Process might be one way to find the solution for this research problem. References Corsten, D and Gruen, T (2004). Stockouts cause walkouts, Harvard Business Review, 82(5): Das, S K and Abdel-Malek L (2003). Modeling the flexibility of order quantities and lead-times in supply chains, International Journal of Production Economics, 85(2): Fisher, M (1997). What is the right supply chain for your product?, Harvard Business Review, 75(2): Hadley, G and Whitin, T M (1963). Analysis of Inventory Systems, Prentice Hall, Inc., Englewood Cliffs, NJ Harris, F (1913). How many parts to make at once. Factory, The Magazine of Management, 10: , 152 Johansen, S G and Thorstenson, A (2004). The (r, q) policy for the lost-sales inventory system when more than one order may be outstanding, Working Paper L , Aarhus School of Business, University of Aarhus Lee H L (2002). Aligning supply chain strategies with product uncertainties, California Management Review, 44(3): Riezebos, J. (2006). Inventory order crossover, International Journal of Production Economics, 104(2): Song, J.-S. and Zipkin, P.H. (1996). Inventory control with information about supply conditions, Management Science, 42(10): Stalk, G Jr (2006). The costly secret of China sourcing, Harvard Business Review, 84(2): of 7
7 Welborn, C (2008). Strengthening supply chains, Operations Research and Management Science Today (ORMS Today by INFORMS), 35(3): Zipkin, P H (2000). Foundations of Inventory Management, McGraw-Hill, Boston 7 of 7
Optimal base-stock policy for the inventory system with periodic review, backorders and sequential lead times
44 Int. J. Inventory Research, Vol. 1, No. 1, 2008 Optimal base-stock policy for the inventory system with periodic review, backorders and sequential lead times Søren Glud Johansen Department of Operations
More informationRisk-Pooling Effects of Emergency Shipping in a Two-Echelon Distribution System
Seoul Journal of Business Volume 8, Number I (June 2002) Risk-Pooling Effects of Emergency Shipping in a Two-Echelon Distribution System Sangwook Park* College of Business Administration Seoul National
More informationExact Fill Rates for the (R, S) Inventory Control with Discrete Distributed Demands for the Backordering Case
Informatica Economică vol. 6, no. 3/22 9 Exact Fill ates for the (, S) Inventory Control with Discrete Distributed Demands for the Backordering Case Eugenia BABILONI, Ester GUIJAO, Manuel CADÓS, Sofía
More informationEvaluating the Lead Time Demand Distribution for (r, Q) Policies Under Intermittent Demand
Proceedings of the 2009 Industrial Engineering Research Conference Evaluating the Lead Time Demand Distribution for (r, Q) Policies Under Intermittent Demand Yasin Unlu, Manuel D. Rossetti Department of
More informationSingle item inventory control under periodic review and a minimum order quantity
Single item inventory control under periodic review and a minimum order quantity G. P. Kiesmüller, A.G. de Kok, S. Dabia Faculty of Technology Management, Technische Universiteit Eindhoven, P.O. Box 513,
More informationNote: Optimal base-stock policy for the inventory system with periodic review, backorders and sequential lead times
WORKING PAPER L-2006-02 Søren Glud Johansen & Anders Thorstenson Note: Optimal base-stock polic for the inventor sstem with periodic review, backorders and sequential lead times Note: Optimal base-stock
More informationA Programme Implementation of Several Inventory Control Algorithms
BULGARIAN ACADEMY OF SCIENCES CYBERNETICS AND INFORMATION TECHNOLOGIES Volume, No Sofia 20 A Programme Implementation of Several Inventory Control Algorithms Vladimir Monov, Tasho Tashev Institute of Information
More informationINTEGRATED OPTIMIZATION OF SAFETY STOCK
INTEGRATED OPTIMIZATION OF SAFETY STOCK AND TRANSPORTATION CAPACITY Horst Tempelmeier Department of Production Management University of Cologne Albertus-Magnus-Platz D-50932 Koeln, Germany http://www.spw.uni-koeln.de/
More informationAnalysis of Various Forecasting Approaches for Linear Supply Chains based on Different Demand Data Transformations
Institute of Information Systems University of Bern Working Paper No 196 source: https://doi.org/10.7892/boris.58047 downloaded: 16.11.2015 Analysis of Various Forecasting Approaches for Linear Supply
More informationInformation Sharing in Supply Chain Management: A Literature Review on Analytical Research
Information Sharing in Supply Chain Management: A Literature Review on Analytical Research Hyun-cheol Paul Choi California State University, Fullerton, CA In this paper, we reviewed the area of upstream
More informationSUPPLY CHAIN MANAGEMENT TRADEOFFS ANALYSIS
Proceedings of the 2004 Winter Simulation Conference R.G. Ingalls, M. D. Rossetti, J. S. Smith, and B. A. Peters, eds. SUPPLY CHAIN MANAGEMENT TRADEOFFS ANALYSIS Sanjay Jain Center for High Performance
More informationAnalysis of a Production/Inventory System with Multiple Retailers
Analysis of a Production/Inventory System with Multiple Retailers Ann M. Noblesse 1, Robert N. Boute 1,2, Marc R. Lambrecht 1, Benny Van Houdt 3 1 Research Center for Operations Management, University
More informationCourse Supply Chain Management: Inventory Management. Inventories cost money: Reasons for inventory. Types of inventory
Inventories cost money: Inventories are to be avoided at all cost? Course Supply Chain Management: Or Inventory Management Inventories can be useful? Chapter 10 Marjan van den Akker What are reasons for
More informationSIMULATION-BASED ANALYSIS OF THE BULLWHIP EFFECT UNDER DIFFERENT INFORMATION SHARING STRATEGIES
SIMULATION-BASED ANALYSIS OF THE BULLWHIP EFFECT UNDER DIFFERENT INFORMATION SHARING STRATEGIES Yuri A. Merkuryev and Julija J. Petuhova Rik Van Landeghem and Steven Vansteenkiste Department of Modelling
More informationTEACHING AGGREGATE PLANNING IN AN OPERATIONS MANAGEMENT COURSE
TEACHING AGGREGATE PLANNING IN AN OPERATIONS MANAGEMENT COURSE Johnny C. Ho, Turner College of Business, Columbus State University, Columbus, GA 31907 David Ang, School of Business, Auburn University Montgomery,
More informationFIXED CHARGE UNBALANCED TRANSPORTATION PROBLEM IN INVENTORY POOLING WITH MULTIPLE RETAILERS
FIXED CHARGE UNBALANCED TRANSPORTATION PROBLEM IN INVENTORY POOLING WITH MULTIPLE RETAILERS Ramidayu Yousuk Faculty of Engineering, Kasetsart University, Bangkok, Thailand ramidayu.y@ku.ac.th Huynh Trung
More informationKey Benefits: Minimize lead times and maximize on-time deliveries to customers. Respond quickly to changes in demand for materials and capacity
Microsoft Business Solutions Axapta Master Planning streamlines your manufacturing processes and supply chain to help you reduce costs and satisfy customer demands. Key Benefits: Minimize lead times and
More informationApproximation Algorithms for Stochastic Inventory Control Models
Approximation Algorithms for Stochastic Inventory Control Models (Abstract) Retsef Levi Martin Pál Robin O. Roundy David B. Shmoys School of ORIE, Cornell University, Ithaca, NY 14853, USA DIMACS Center,
More informationInventory Control with Overtime and Premium Freight
Inventory Control with Overtime and Premium Freight Eric Huggins Department of Industrial and Operations Engineering University of Michigan Ann Arbor, Michigan, USA hugginse@engin.umich.edu Tava Olsen
More informationHow To Find The Optimal Base Stock Level In A Supply Chain
Optimizing Stochastic Supply Chains via Simulation: What is an Appropriate Simulation Run Length? Arreola-Risa A 1, Fortuny-Santos J 2, Vintró-Sánchez C 3 Abstract The most common solution strategy for
More informationInventory Management and Risk Pooling. Xiaohong Pang Automation Department Shanghai Jiaotong University
Inventory Management and Risk Pooling Xiaohong Pang Automation Department Shanghai Jiaotong University Key Insights from this Model The optimal order quantity is not necessarily equal to average forecast
More informationMathematical Modeling of Inventory Control Systems with Lateral Transshipments
Mathematical Modeling of Inventory Control Systems with Lateral Transshipments Lina Johansson Master Thesis Department of Industrial Management and Logistics Division of Production Management Lund university,
More informationSPARE PARTS INVENTORY SYSTEMS UNDER AN INCREASING FAILURE RATE DEMAND INTERVAL DISTRIBUTION
SPARE PARS INVENORY SYSEMS UNDER AN INCREASING FAILURE RAE DEMAND INERVAL DISRIBUION Safa Saidane 1, M. Zied Babai 2, M. Salah Aguir 3, Ouajdi Korbaa 4 1 National School of Computer Sciences (unisia),
More informationList of Tables. Table No Title Page No 2.1 Market Segments in Indian retail 25
List of Tables Table No Title Page No 2.1 Market Segments in Indian retail 25 2.2 Organized retail penetration levels 25 3.1 Pattern of control in ABC analysis 58 3.2 Various selective inventory control
More informationCustomers with positive demand lead times place orders in advance of their needs. A
Replenishment Strategies for Distribution Systems Under Advance Demand Information Özalp Özer Department of Management Science and Engineering, Stanford University, Stanford, California 94305 ozalp@stanford.edu
More informationFour Strategies for Smarter Inventory Control
Whitepaper April 2016 Four Strategies for Smarter Inventory Control Section 01 Synopsis This paper is provided for companies that carry inventory (manufacturers, distributors, retailers and service providers)
More informationIntroduction. Chapter 1
Chapter 1 Introduction The success of Japanese companies in the second half of the 20th century has lead to an increased interest in inventory management. Typically, these companies operated with far less
More informationOperations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology, Madras
Operations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology, Madras Lecture - 36 Location Problems In this lecture, we continue the discussion
More informationA Simulation to Illustrate Periodic-Review Inventory Control Policies
Spreadsheets in Education (ejsie) Volume 4 Issue 2 Article 4 12-21-2010 A Simulation to Illustrate Periodic-Review Inventory Control Policies Matthew J. Drake Duquesne University, drake987@duq.edu Kathryn
More informationInventory Control Policy of Preventive Lateral Transshipment between Retailers in Multi Periods
Journal of Industrial Engineering and Management JIEM, 2014 7(3): 681-697 Online ISSN: 2013-0953 Print ISSN: 2013-8423 http://dx.doi.org/10.3926/jiem.1068 Inventory Control Policy of Preventive Lateral
More informationAligning Supply Chain Strategies with Product Uncertainties. Lee, Hau L. California Management Review, Vol. 44, No. 3, (2002) pp.
Aligning Supply Chain Strategies with Product Uncertainties 1 Lee, Hau L. California Management Review, Vol. 44, No. 3, (2002) pp. 105-119 April 1 3, 2013 Overview 2 Issue addressed Fit into broader field
More informationInventory Control with Risk of Major Supply Chain Disruptions. Brian M. Lewis
Inventory Control with Risk of Major Supply Chain Disruptions A Thesis Presented to The Academic Faculty by Brian M. Lewis In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy
More informationChapter 9. Inventory management
Chapter 9 Inventory management Slack et al s model of operations management Direct Design Operations Management Deliver Develop Supply network management Capacity management Inventory management Planning
More informationOperations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology Madras
Operations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology Madras Lecture - 41 Value of Information In this lecture, we look at the Value
More informationPerishable Items in Multi-Level Inventory Systems
Perishable Items in Multi-Level Inventory Systems Department of Industrial Management and Logistics, LTH Master Thesis presented by Yann Bouchery Double Degree Student Ecole Centrale de Lille (France)
More informationBuilding Relationships by Leveraging your Supply Chain. An Oracle White Paper December 2001
Building Relationships by Leveraging your Supply Chain An Oracle White Paper December 2001 Building Relationships by Leveraging your Supply Chain EXECUTIVE OVERVIEW This white paper illustrates why a fusion
More informationBasics of inventory control
35A00210 Operations Management Lecture 13 control Lecture 13 control Basics of inventory control models continuous review periodic review other models Basics of inventory control control is boring but
More informationINFLUENCE OF DEMAND FORECASTS ACCURACY ON SUPPLY CHAINS DISTRIBUTION SYSTEMS DEPENDABILITY.
INFLUENCE OF DEMAND FORECASTS ACCURACY ON SUPPLY CHAINS DISTRIBUTION SYSTEMS DEPENDABILITY. Natalia SZOZDA 1, Sylwia WERBIŃSKA-WOJCIECHOWSKA 2 1 Wroclaw University of Economics, Wroclaw, Poland, e-mail:
More informationTHE IMPLEMENTATION OF VENDOR MANAGED INVENTORY IN THE SUPPLY CHAIN WITH SIMPLE PROBABILISTIC INVENTORY MODEL
THE IMPLEMENTATION OF VENDOR MANAGED INVENTORY IN THE SUPPLY CHAIN WITH SIMPLE PROBABILISTIC INVENTORY MODEL Ika Deefi Anna Departement of Industrial Engineering, Faculty of Engineering, University of
More informationA QUEUEING-INVENTORY SYSTEM WITH DEFECTIVE ITEMS AND POISSON DEMAND. bhaji@usc.edu
A QUEUEING-INVENTORY SYSTEM WITH DEFECTIVE ITEMS AND POISSON DEMAND Rasoul Hai 1, Babak Hai 1 Industrial Engineering Department, Sharif University of Technology, +98-1-66165708, hai@sharif.edu Industrial
More informationChapter 6. Inventory Control Models
Chapter 6 Inventory Control Models Learning Objectives After completing this chapter, students will be able to: 1. Understand the importance of inventory control and ABC analysis. 2. Use the economic order
More informationAlessandro Anzalone, Ph.D. Hillsborough Community College, Brandon Campus
Alessandro Anzalone, Ph.D. Hillsborough Community College, Brandon Campus 1. Introduction 2. Basic Concepts of Inventory 3. Categories of Inventory 4. The Basic Inventory Lot Sizing Model Economic Order
More informationThe 2011 Global Supply Chain Agenda Market and demand volatility drives the need for supply chain visibility
The 2011 Global Supply Chain Agenda Market and demand volatility drives the need for supply chain visibility Cover-Reference Number The Supply Chain agenda in 2011 2 The 2011 Global Supply Chain Agenda
More informationPlanning Optimization in AX2012
Planning Optimization in AX2012 Streamline your manufacturing operations with Master Planning and Forecasting Kevin Cosman 11 June 2013 About the Presenter Kevin Cosman, Senior Solutions consultant with
More informationA numerical study of expressions for fill rate for single stage inventory system with periodic review.
University of Louisville ThinkIR: The University of Louisville's Institutional Repository Electronic Theses and Dissertations 8-2013 A numerical study of expressions for fill rate for single stage inventory
More informationInventory Management: Fundamental Concepts & EOQ. Chris Caplice ESD.260/15.770/1.260 Logistics Systems Oct 2006
Inventory Management: Fundamental Concepts & EOQ Chris Caplice ESD.260/15.770/1.260 Logistics Systems Oct 2006 Agenda Wrap up of Demand Forecasting Fundamentals of Inventory Management Economic Order Quantity
More informationESTABLISHING CONTROL ON CONSUMABLES INVENTORY IN A PRESSURE VESSEL MANUFACTURING INDUSTRY USING MICROSOFT EXCEL (A CASE STUDY)
ESTABLISHING CONTROL ON CONSUMABLES INVENTORY IN A PRESSURE VESSEL MANUFACTURING INDUSTRY USING MICROSOFT EXCEL (A CASE STUDY) Vignesh Ravichandran 1, N.Ganesh Kumar 2 1 UG Scholar, Dept. of Mechanical
More informationSUPPLY CHAIN MODELING USING SIMULATION
SUPPLY CHAIN MODELING USING SIMULATION 1 YOON CHANG AND 2 HARRIS MAKATSORIS 1 Institute for Manufacturing, University of Cambridge, Cambridge, CB2 1RX, UK 1 To whom correspondence should be addressed.
More informationA Stochastic Programming Based Approach to Assemble-to-Order Inventory Systems
A Stochastic Programming Based Approach to Assemble-to-Order Inventory Systems 1 2 1 0 2 Marty Reiman Alcatel-Lucent Bell Labs (Based on joint work with Mustafa Dogru and Qiong Wang) Talk Outline The Assemble-to-Order
More informationInventory Management & Optimization in Practice
Inventory Management & Optimization in Practice Lecture 16 ESD.260 Logistics Systems Fall 2006 Edgar E. Blanco, Ph.D. Research Associate MIT Center for Transportation & Logistics 1 Session goals The challenges
More informationThe Next Generation of Inventory Optimization has Arrived
The Next Generation of Inventory Optimization has Arrived Cutting-edge demand classification technology integrated with network optimization and simulation enables cost reduction and increased inventory
More informationDynamic Simulation and Supply Chain Management
Dynamic Simulation and Supply Chain Management White Paper Abstract This paper briefly discusses how dynamic computer simulation can be applied within the field of supply chain management to diagnose problems
More informationTHE INTEGRATION OF SUPPLY CHAIN MANAGEMENT AND SIMULATION SYSTEM WITH APPLICATION TO RETAILING MODEL. Pei-Chann Chang, Chen-Hao Liu and Chih-Yuan Wang
THE INTEGRATION OF SUPPLY CHAIN MANAGEMENT AND SIMULATION SYSTEM WITH APPLICATION TO RETAILING MODEL Pei-Chann Chang, Chen-Hao Liu and Chih-Yuan Wang Institute of Industrial Engineering and Management,
More informationChapter 1 Introduction to Inventory Replenishment Planning
Chapter 1 Introduction to Inventory Replenishment Planning Chapter Contents OVERVIEW... 7 IMPACT OF INVENTORY... 7 FUNCTION OF INVENTORY... 8 SUMMARY OF FUNCTIONALITY... 9 REFERENCES... 10 6 Chapter 1.
More informationINFORMATION TECHNOLOGIES AND MATERIAL REQUIREMENT PLANNING (MRP) IN SUPPLY CHAIN MANAGEMENT (SCM) AS A BASIS FOR A NEW MODEL
Bulgarian Journal of Science and Education Policy (BJSEP), Volume 4, Number 2, 2010 INFORMATION TECHNOLOGIES AND MATERIAL REQUIREMENT PLANNING (MRP) IN SUPPLY CHAIN MANAGEMENT (SCM) AS A BASIS FOR A NEW
More informationSTOCHASTIC PERISHABLE INVENTORY CONTROL SYSTEMS IN SUPPLY CHAIN WITH PARTIAL BACKORDERS
Int. J. of Mathematical Sciences and Applications, Vol. 2, No. 2, May 212 Copyright Mind Reader Publications www.journalshub.com STOCHASTIC PERISHABLE INVENTORY CONTROL SYSTEMS IN SUPPLY CHAIN WITH PARTIAL
More informationOutline. Logistics and Supply Chain Management. Competitive and Supply Chain Strategies. What is Supply Chain Management? Supply Chain Performance
Logistics and Supply Chain Management Supply Chain Performance 1 Outline Competitive and supply chain strategies Ahi Achieving i strategic t fit Expanding strategic scope Chopra and Meindl (2006) Supply
More informationSupply Chain Analysis Tools
Supply Chain Analysis Tools MS&E 262 Supply Chain Management April 14, 2004 Inventory/Service Trade-off Curve Motivation High Inventory Low Poor Service Good Analytical tools help lower the curve! 1 Outline
More informationBlending petroleum products at NZ Refining Company
Blending petroleum products at NZ Refining Company Geoffrey B. W. Gill Commercial Department NZ Refining Company New Zealand ggill@nzrc.co.nz Abstract There are many petroleum products which New Zealand
More informationAgile Manufacturing for ALUMINIUM SMELTERS
Agile Manufacturing for ALUMINIUM SMELTERS White Paper This White Paper describes how Advanced Information Management and Planning & Scheduling solutions for Aluminium Smelters can transform production
More informationMeeting the Challenges of Supply Chain Management
Meeting the Challenges of Supply Chain Management Brand owners require innovative product configuration strategies to optimize supply chain effectiveness By John R. Kenney, Jr., ModusLink Corporation Price
More informationA MANAGER S ROADMAP GUIDE FOR LATERAL TRANS-SHIPMENT IN SUPPLY CHAIN INVENTORY MANAGEMENT
A MANAGER S ROADMAP GUIDE FOR LATERAL TRANS-SHIPMENT IN SUPPLY CHAIN INVENTORY MANAGEMENT By implementing the proposed five decision rules for lateral trans-shipment decision support, professional inventory
More informationTechnology Trends in MRO Inventory Management
June 2012 Technology Trends in MRO Inventory Management Technological Advances Technological advances are changing the dynamics in level of MRO inventory management and data management has a distinct focus
More informationInventory Models for Special Cases: A & C Items and Challenges
CTL.SC1x -Supply Chain & Logistics Fundamentals Inventory Models for Special Cases: A & C Items and Challenges MIT Center for Transportation & Logistics Inventory Management by Segment A Items B Items
More informationCase study of a batch-production/inventory system E.M.M. Winands 1, A.G. de Kok 2 and C. Timpe 3
Case study of a batch-production/inventory system E.M.M. Winands 1, A.G. de Kok 2 and C. Timpe 3 The plant of BASF under consideration consists of multiple parallel production lines, which produce multiple
More informationA simulation study on supply chain performance with uncertainty using contract. Creative Commons: Attribution 3.0 Hong Kong License
Title A simulation study on supply chain performance with uncertainty using contract Author(s) Chan, FTS; Chan, HK Citation IEEE International Symposium on Intelligent Control Proceedings, the 13th Mediterrean
More informationCHOICES The magazine of food, farm, and resource issues
CHOICES The magazine of food, farm, and resource issues 4th Quarter 2005 20(4) A publication of the American Agricultural Economics Association Logistics, Inventory Control, and Supply Chain Management
More informationOptimization of Fuzzy Inventory Models under Fuzzy Demand and Fuzzy Lead Time
Tamsui Oxford Journal of Management Sciences, Vol. 0, No. (-6) Optimization of Fuzzy Inventory Models under Fuzzy Demand and Fuzzy Lead Time Chih-Hsun Hsieh (Received September 9, 00; Revised October,
More informationEVERYTHING YOU NEED TO KNOW ABOUT INVENTORY
EVERYTHING YOU NEED TO KNOW ABOUT INVENTORY Introduction Inventory is considered the necessary evil of the supply chain. In fact, there has been a whole movement; lean manufacturing that has tried to reduce
More informationSupply Chain Performance Achieving Strategic Fit and Scope. Bent Steenholt Kragelund benk@itu.dk
Supply Chain Performance Achieving Strategic Fit and Scope Bent Steenholt Kragelund benk@itu.dk Competitive and Supply Chain Strategies Competitive strategy defines the set of customer needs a firm seeks
More informationSupply Chain Inventory Management Chapter 9. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 09-01
Supply Chain Inventory Management Chapter 9 09-01 What is a Inventory Management? Inventory Management The planning and controlling of inventories in order to meet the competitive priorities of the organization.
More informationModeling and Optimization of an Industrial Inventory Management System
Modeling and Optimization of an Industrial Inventory Management System Design Team Katia Lisboa, Jaime Bonifasi, Cristina Cromeyer, Frederick Stewart Design Advisor Prof. Abe Zeid Sponsor Barry Controls
More informationChapter 12 Inventory Control and Management
Chapter 12 Inventory Control and Management Learning Outcomes Describe the functions and costs of an inventory system. Determine the order quantity and Economic Order Quantity. Determine the reorder point
More informationOptimise initial spare parts inventories: an analysis and improvement of an electronic decision tool
Optimise initial spare parts inventories: an analysis and improvement of an electronic decision tool M.E. Trimp, BSc, S.M. Sinnema, BSc, Prof. dr. ir. R. Dekker* and Dr. R.H. Teunter Department of Econometrics
More informationLogistics Management SC Performance, SC Drivers and Metrics. Özgür Kabak, Ph.D.
Logistics Management SC Performance, SC Drivers and Metrics Özgür Kabak, Ph.D. Outline Supply Chain Performance: Achieving Strategic Fit and Scope Competitive and supply chain strategies Achieving strategic
More informationHow human behaviour amplifies the bullwhip effect a study based on the beer distribution game online
How human behaviour amplifies the bullwhip effect a study based on the beer distribution game online Joerg Nienhaus *, Arne Ziegenbein *, Christoph Duijts + * Centre for Enterprise Sciences (BWI), Swiss
More information7 Conclusions and suggestions for further research
7 Conclusions and suggestions for further research This research has devised an approach to analyzing system-level coordination from the point of view of product architecture. The analysis was conducted
More informationInventory Management - A Teaching Note
Inventory Management - A Teaching Note Sundaravalli Narayanaswami W.P. No.2014-09-01 September 2014 INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA Inventory Management - A Teaching Note Sundaravalli
More informationStatistical Inventory Management in Two-Echelon, Multiple-Retailer Supply Chain Systems
Statistical Management in Two-Echelon, Multiple-Retailer Supply Chain Systems H. T. Lee, Department of Business Administration, National Taipei University, Taiwan Z. M. Liu, Department of Business Administration,
More informationEconomic Order Quantity (EOQ) Model
Global Journal of Finance and Economic Management. ISSN 2249-3158 Volume 5, Number 1 (2016), pp. 1-5 Research India Publications http://www.ripublication.com Economic Order Quantity (EOQ) Model Dr. Rakesh
More informationContents. List of figures List of tables. Abbreviations
Contents List of figures List of tables Preface Abbreviations xv xxi xxiii xxix PART 1 CONCEPTS OF LOGISTICS AND DISTRIBUTION 1 Introduction to logistics and distribution 3 Introduction 3 Definitions 4
More informationAntti Salonen KPP227 - HT 2015 KPP227
- HT 2015 1 Inventory management Inventory management concerns short-range decisions about supplies, inventories, production levels, staffing patterns, schedules and distribution. The decisions are often
More informationInventory Performance Management INVENTORY TRENDS INVENTORY PLANNING INVENTORY POSITION & ANALYSIS & OPTIMIZATION & PROJECTIONS
Performance Management INVENTORY TRENDS INVENTORY PLANNING INVENTORY POSITION & ANALYSIS & OPTIMIZATION & PROJECTIONS A significant cost to manufacturing, distribution and retail businesses is the inventory
More informationCopyright. Network and Protocol Simulation. What is simulation? What is simulation? What is simulation? What is simulation?
Copyright Network and Protocol Simulation Michela Meo Maurizio M. Munafò Michela.Meo@polito.it Maurizio.Munafo@polito.it Quest opera è protetta dalla licenza Creative Commons NoDerivs-NonCommercial. Per
More informationJournal of Emerging Trends in Engineering and Applied Sciences (JETEAS) 4(1):115-120 (ISSN: 2141-7016)
Journal of Emerging Trends in Engineering and Applied Sciences (JETEAS) 4(1):115-120 Scholarlink Research Institute Journals, 2013 (ISSN: 2141-7016) jeteas.scholarlinkresearch.org Journal of Emerging Trends
More informationSystem-Dynamics modelling to improve complex inventory management in a batch-wise plant
European Symposium on Computer Arded Aided Process Engineering 15 L. Puigjaner and A. Espuña (Editors) 2005 Elsevier Science B.V. All rights reserved. System-Dynamics modelling to improve complex inventory
More informationE217 Inventory Management (4 Modular Credits)
E17 Inventory Management ( Modular Credits) This document addresses the content related abilities, with reference to the module. Abilities of learning, thinking, problem solving, teamwork, communication,
More informationInformation Sharing to Reduce Fluctuations in Supply Chains: A Dynamic Feedback Approach
Information Sharing to Reduce Fluctuations in Supply Chains: A Dynamic Feedback Approach Baris Gunduz Yaman Barlas Ford Otosan Bogazici University Ankara Asf. 4.Km Department of Industrial Engineering
More informationOptimal replenishment for a periodic review inventory system with two supply modes
European Journal of Operational Research 149 (2003) 229 244 Production, Manufacturing and Logistics Optimal replenishment for a periodic review inventory system with two supply modes Chi Chiang * www.elsevier.com/locate/dsw
More informationInventory basics. 35A00210 Operations Management. Lecture 12 Inventory management. Why do companies use inventories? Think about a Siwa store
35A00210 Operations Management Lecture 12 Inventory management Lecture 12 Inventory management Inventory basics Inventory basics Pros and cons of inventory Inventory numbers Inventory management in practice
More informationSTRATEGIC CAPACITY PLANNING USING STOCK CONTROL MODEL
Session 6. Applications of Mathematical Methods to Logistics and Business Proceedings of the 9th International Conference Reliability and Statistics in Transportation and Communication (RelStat 09), 21
More informationOptimizing Inventory in an Omni-channel World
RETAIL PERSPECTIVES: Best Practices for Safety Stock and Replenishment Buying Optimizing Inventory in an Omni-channel World 2 Keys to Profitably Saving the Sale The retail world is abuzz with stories of
More informationBEST PRACTICES IN DEMAND AND INVENTORY PLANNING
WHITEPAPER BEST PRACTICES IN DEMAND AND INVENTORY PLANNING for Food & Beverage Companies WHITEPAPER BEST PRACTICES IN DEMAND AND INVENTORY PLANNING 2 ABOUT In support of its present and future customers,
More informationSUPPLY CHAIN MANAGEMENT AT A GLOBAL LEVEL A CHALLENGE AND AN OPPORTUNITY FOR A LEADING OILFIELD SERVICE COMPANY. Amaar Saeed Khan
SUPPLY CHAIN MANAGEMENT AT A GLOBAL LEVEL A CHALLENGE AND AN OPPORTUNITY FOR A LEADING OILFIELD SERVICE COMPANY Amaar Saeed Khan EXECUTIVE SUMMARY: Due to the complex nature of the oil and gas industry,
More informationManaging the After Sales Logistic Network A Simulation Study of a Spare Parts Supply Chain
Managing the After Sales Logistic Network A Simulation Study of a Spare Parts Supply Chain Fredrik Persson 1 and Nicola Saccani 2 1 Linkoping University, Department of Management and Engineering, Linköping,
More informationHow To Manage Production
DESIGNING INVENTORY MANAGEMENT SYSTEM: A CASE OF RETAIL STORE IN CIANJUR, INDONESIA Rianti Indah Lestari School of Business and Management, Bandung Institute of Technology Bandung, West Java, Indonesia
More informationA Profit-Maximizing Production Lot sizing Decision Model with Stochastic Demand
A Profit-Maximizing Production Lot sizing Decision Model with Stochastic Demand Kizito Paul Mubiru Department of Mechanical and Production Engineering Kyambogo University, Uganda Abstract - Demand uncertainty
More informationPrescriptive Analytics. A business guide
Prescriptive Analytics A business guide May 2014 Contents 3 The Business Value of Prescriptive Analytics 4 What is Prescriptive Analytics? 6 Prescriptive Analytics Methods 7 Integration 8 Business Applications
More informationMATERIAL PURCHASING MANAGEMENT IN DISTRIBUTION NETWORK BUSINESS
MATERIAL PURCHASING MANAGEMENT IN DISTRIBUTION NETWORK BUSINESS Turkka Kalliorinne Finland turkka.kalliorinne@elenia.fi ABSTRACT This paper is based on the Master of Science Thesis made in first half of
More informationApplying Actual Usage Inventory Management Best Practice in a Health Care Supply Chain
Applying Actual Usage Inventory Management Best Practice in a Health Care Supply Chain Vijith Varghese #1, Manuel Rossetti #2, Edward Pohl #3, Server Apras *4, Douglas Marek #5 # Department of Industrial
More information