An approach to develop base-stock inventory control policy in serial production systems with some stochastic features (original) (raw)
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2015
Background: Due to random changes in demand, inventory management is still despite the development of alternative goods flow management concepts an important issue both in terms of costs of maintenance and replenishment as well as the level of service measured by inventory availability levels. There are a number of replenishment systems to be used in such conditions, but they are most often formed on the basis of two basic ones: a system based on the reorder point and based on periodic inspection. This paper refers to the former system, the BS system (min-max), in which an order is placed after reaching inventory level B (information level, reorder point) for a quantity allowing to reach level S. This system is very often used in business practice. Observations conducted under realistic conditions indicate the need to improve the classical models describing the system. This results, among other things, from the fact that the actual level of available inventory at the start of the re...
Inventory Control Models and Methods
Inventory control is a major field in OR. Interest in the problems of optimal stock management at a scientific level goes back to the start of the 20th century. The most important impulse, however, came after the 2nd World War when scientists of the caliber of Jacob, Marschak, Kenneth Arrow, Samuel Karlin among others looked into the problem of optimal stocking under stochastic demand. It was characteristic of this discipline, that methods of solving problems of this type were developed first before the necessary commercial electronic data processing for their ready application were available.
Basic Concepts in Inventory Management 2
In this chapter, the concept of inventory is discussed which is central to materials management function. The definition of inventory and various types of inventories -raw materials, finished goods, in-process inventory, MRO inventory, etc. -are outlined. The need to keep inventory and the functions of inventory as a decoupling agent to enable various subsystems in a supply chain to be decoupled are described. The inventory-related cost parameters are listed along with methods of estimating these. Other situational parameters like demand and lead times also need to be estimated. Before an inventory model is employed for optimal operation of the inventory system, an appropriate inventory policy has to be selected. Three types of inventory policies are described, and their relative strengths and weaknesses are discussed. A taxonomy of inventory models is presented to give an overview of a plethora of inventory models available in inventory management literature. However, the right choice of the inventory model is crucial for the success of inventory management.
A Comparison of Three Joint Ordering Inventory Policies
Decision Sciences, 1992
This paper evaluates the performance of a joint ordering inventory policy which was fmt suggested and characterized by Renberg and Planche [ 141. This ]paper shows that the policy is easily characterid for Poisson demands. This policy is then compared with two other joint ordving policies4e well-known (S,c,s) or can-order policy of Balintfy [3] and the recent periodic policies suggested by Atkins and Iyogun [2]. For a continuous review operating environment, the Renbcrg and Planche policy utilizes a group reorder point and a combined order quantity (Q), with each item maintaining an order-upto level (5'). For the can-order policy. each item in the product group has a must-order point (s), a can-order point (c) and an order-upto level (9. The periodic policies require that item orders be grouped at some fixed scheduled intervals. Using long-run total average costs as the basis, it is shown that no one policy is superior to the others in all the examples tested. In some cases, the Renberg and Planche policy performs surprisingly well.
Inventory Control Logistics and Technicalities
Inventory can be regarded as a stock of goods. Here, we consider inventory as an idle but usable resource. It includes; labor, raw materials, finished goods and equipment stock is reserved to provide a flow of supply. In addition to design, planning, and inventory control, the applications of queueing theory can also be found in performance evaluation and improvement, logistics and transportation, and other areas of supply chain. The scope of logistics has been considerably extended, as it has been recognized as one of the important tools for developing competitiveness. In this work, efforts are being intensified on harmonizing the logistic technicalities with inventory control.
A Continuous Review Model for an Inventory System with Two Supply Modes
Management Science, 1988
In this paper we develop an approximate model of an inventory control system in which there exist two options for resupply, with one having a shorter lead time. Because the optimal policy appears to be extremely complex, we consider a reasonable extension of the standard (Q, R) policy to allow for two different lot sizes QI and Q2, and two different reorder levels, R I and R2. Expressions for the expected on hand inventory and the expected backorders are developed and a procedure for determining the policy parameters is given. The model is validated by simulation, and calculations are included which compare the average annual cost with and without emergency ordering. (INVENTORY PRODUCTION; OPERATING CHARACTERISTICS; LEADTIME POL-ICY; ORDERING POLICY; STOCHASTIC MODELS)
A periodic review inventory system with two supply modes
European Journal of Operational Research, 1996
We describe a periodic review inventory system in which there are two modes of resupply, namely a regular mode and an emergency mode. Orders placed through the emergency channel have a shorter supply lead time but are subject to higher ordering costs compared to orders placed through the regular channel. We analyze this problem within the framework of an order-up-to-R inventory control policy. At each review epoch, the inventory manager must decide which of the two supply modes to use and then order enough units to raise the inventory position to a level R. We show that given any non-negative order-up-to level, either only the regular supply mode is used, or there exists an indifference inventory level such that if the inventory position at the review epoch is below the indifference inventory level, the emergency supply mode is used. We also develop procedures for solving for the two policy parameters, i.e., the order-up-to level and the indifference inventory level.