Analysis of postponement strategy by EPQ-based models with planned backorders (original) (raw)
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We propose an EPQ model with partial backorders considering linear and fixed backordering costs. Time intervals rather than ordering size and backordering level are used as decision variables to derive the closed-form optimal solution. Our approach analyzes different optimal inventory policies and decides whether shortage period should be scheduled. In addition, a critical backordering rate is derived to determine the feasible optimal solution. The numerical example is provided to illustrate the solution procedure.
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The classic Economic Order Quantity model assumes that the unit purchasing cost is not based on the order quantity. In practice, a supplier may offer purchasers an all-units discount. We develop a model and solution procedure for the EOQ with all-unit discounts and partial backordering at a constant rate. We show, and illustrate with a numerical example, how that model can be used to find the solution for the EOQ with discount and full backordering. A multi-factor experiment is used to gain insights into the improvement in performance of the proposed procedure relative to using the basic EOQ or the EOQ with full backordering and to identify the model parameters that have the greatest impact on the model's performance.
Analyzing the Postponement of Time Production Systems in Make-To-Stock and Seasonal Demand
2011
The supply chain management, postponement and demand management functions are of strategic importance to the economic success of organizations because they influence the production process, when viewed in isolation and empirically may hinder understanding of their behavior. The aim of this paper is to analyze the influence of the postponement in an enterprise production system with make-to-stock and with seasonal demand. The research method used was a case study, the instruments of data collection were semi-structured interviews, documentary analysis and site visits. This research is restricted to analysis of the influence that different levels of delay and the company's position in the supply chain have on the practice of demand management in the productive segment graphic, product spiral notebook and also in relation to geographical focus (region of the state São Paulo), in which it will seek to interview the managers and directors. As a way to support the research on the analysis of case study and the final considerations will be discussed the following issues: supply chain management, postponement, demand management and production system make-to-stock. The demand management can be understood as a practice that allows you to manage and 26 coordinate the supply chain in reverse, i.e. the consumer to the supplier, in which consumers trigger actions for the supply of products can make the process more efficient. The purpose of managing the supply chain is able to allow the addition of value, exceeding the expectations of consumers, it is necessary to develop a relationship with suppliers and customers win-win. The postponement strategy must fit the characteristics of the turbulent environment within the markets along with demands that require variety of customized products and services and reasonable costs, aiming to support decision making. The postponement of time can be a way to soften the increase in inventory of finished product in the company, which may have a high value, being necessary to reduce the lead time and also suppliers to change their production strategy of make-to-stock to make-to-order. The production system make-to-stock shows enough interest to organizations that are operating in markets with high demand variability, i.e. variations in seasonal as a way of trying to protect their production and be more responsive to market needs.
Dynamic Price and Quantity Postponement Strategies
International Journal of Information Systems and Supply Chain Management, 2010
This paper studies duopolistic competition under dynamic price and production quantity postponement for two differentiable products, which share common components from one supplier at a certain degree of substitution. Both price and quantity postponement is benchmarked according to the Bertrand and Cournot Stackelberg game. In addition, system dynamic is applied to show the long term effect of both strategic decisions (price and production quantity) on profit and against demand uncertainty. The results show that price postponement is appropriate for high modular products (make-to-stock) and production quantity postponement for special orders (make-to-order). The final part of the paper concludes with results and outlines future research directions.
The Optimal Sequence of Production Orders, Taking into Account the Cost of Delays
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In flexible manufacturing systems the most important element in determining the proper course of technological processes, transport and storage is the control and planning subsystem. The key planning task is to determine the optimal sequence of production orders. This paper proposes a new method of determining the optimal sequence of production orders in view of the sum of the costs related to the delayed execution of orders. It takes into account the different unit costs of delays of individual orders and the amount of allowable delays of orders involving no delay costs. The optimum sequence of orders, in the single-machine problem, in view of the sum of the costs of delays may be significantly different from the optimal order, taking into account the sum of delay times.
Postponement in logistics strategies of global supply chains
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The paper aims to present postponement strategy as a crucial element of logistics strategies of today’s global supply chains. The article presents the history of postponement, characteristics of this concept, types of postponement and important information about its implementation in global supply chains. The paper also contains guidelines for future research on postponement concept.
2004
Competitiveness is an important means of determining whether a company will prosper. Business organizations compete with one another in a variety of ways. Among these competitive methods are time and cost factors. The purpose of this paper is to examine the inventory models presented by Padmanabhan and Vrat [International Journal of Systems Sciences 21 (1990) 1721] with a mixture of back orders and lost sales. We develop the criterion for the optimal solution for the total cost function. If the criterion is not satisfied, this model will degenerate into one cycle inventory model with a finite inventory period. This implies an extension of shortage period as long as possible to produce lower cost. However, we know that time is another important factor in company competitiveness. Customers will not indefinitely wait for back orders. A tradeoff will be made between the two most important factors; time and cost. The minimum total cost is evaluated under the diversity cycle time and illustrations are applied to explain the calculation process. This work provides a reference for decision-makers.
An integrated production-inventory model with backorder and lot for lot policy
In this paper, an inventory model for two-stage supply chain is investigated. A supply chain with single vendor and single buyer is considered. We assume that shortage as a backorder is allowed for the buyer and the vendor makes the production set up every time the buyer places an order and supplies on a lot for lot basis. With these assumptions, the joint economic lot size model is introduced and the minimum joint total relevant cost and optimal order quantity and optimal shortage quantity are obtained for both the buyer and the vendor at the same time. Numerical example is given and then Sensitivity analysis is performed to study the effects of changes in the parameters on optimum joint total relevant cost and optimal order quantity and optimal shortage quantity.