Optimizing production and inventory decisions in a supply chain with lot size, production rate and lead time interactions

2013 ◽  
Vol 224 ◽  
pp. 150-165 ◽  
Author(s):  
Hua-Ming Song ◽  
Hui Yang ◽  
Alain Bensoussan
Keyword(s):  
Supply Chain ◽  
Production Rate ◽  
Lead Time ◽  
Lot Size ◽  
Inventory Decisions

An optimal inventory model with interaction of lot size, production rate and lead-time in a fuzzy back-order system

2019 ◽  
Vol 53 (2) ◽  
pp. 517-538
Author(s):  
S. Priyan ◽  
P. Mala ◽  
S. Tiwari
Keyword(s):  
Decision Making ◽  
Production Rate ◽  
Lead Time ◽  
Trade Credit ◽  
Strategic Decision ◽  
Sensitivity Analyses ◽  
Order System ◽  
Lot Size ◽  
Order Rate ◽  
Back Order

This paper examines the decision-making about the interaction of lot size, production rate and lead time between a vendor and a buyer with the consideration of trade credit and fuzzy back-order rate. We assume that the lead time demand is distribution free and the back-order rate is triangular fuzzy number. An economic model is design to determine the optimal lot-size, production rate and lead time while minimizing system total cost. A minimax approach is applied to tackle the model and designed an iterative algorithm to obtain the optimal strategy. Numerical example and sensitivity analyses are given to demonstrate the performance of the proposed methodology and to highlight the differences between crisp and the fuzzy cases. This paper provides optimal decision support tools for managers in the form of mathematical model that improve operational, tactical, and strategic decision making in the fuzzy system. This paper aims to raise the awareness of managers with regard to realistic inventory problems.

scholarly journals Simulation-Based Optimization of a Two-Echelon Continuous Review Inventory Model with Lot Size-Dependent Lead Time

Processes ◽  
2020 ◽  
Vol 8 (9) ◽  
pp. 1014
Author(s):  
Ibrahim Alharkan ◽  
Mustafa Saleh ◽  
Mageed Ghaleb ◽  
Abdulsalam Farhan ◽  
Ahmed Badwelan
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Shop Floor ◽  
Lot Size ◽  
Continuous Review ◽  
Inventory Costs ◽  
Size Dependent ◽  
Simulation Based ◽  
Simulation Based Optimization ◽  
Total Inventory

This study analyzes a stochastic continuous review inventory system (Q,r) using a simulation-based optimization model. The lead time depends on lot size, unit production time, setup time, and a shop floor factor that represents moving, waiting, and lot size inspection times. A simulation-based model is proposed for optimizing order quantity (Q) and reorder point (r) that minimize the total inventory costs (holding, backlogging, and ordering costs) in a two-echelon supply chain, which consists of two identical retailers, a distributor, and a supplier. The simulation model is created with Arena software and validated using an analytical model. The model is interfaced with the OptQuest optimization tool, which is embedded in the Arena software, to search for the least cost lot sizes and reorder points. The proposed model is designed for general demand distributions that are too complex to be solved analytically. Hence, for the first time, the present study considers the stochastic inventory continuous review policy (Q,r) in a two-echelon supply chain system with lot size-dependent lead time L(Q). An experimental study is conducted, and results are provided to assess the developed model. Results show that the optimized Q and r for different distributions of daily demand are not the same even if the associated total inventory costs are close to each other.

scholarly journals Lead-time Dependent Ordering Cost Reduction and Trade-credit: A Supply Chain Model with Stochastic Demand and Rework

2020 ◽  
Vol 8 (5) ◽  
pp. 5113-5117
Keyword(s):  
Supply Chain ◽  
Cost Reduction ◽  
Lead Time ◽  
Trade Credit ◽  
Chain Model ◽  
Lot Size ◽  
Expected Cost ◽  
Production Run ◽  
Supply Chain Model ◽  
Ordering Cost Reduction

This study focuses on an integrated vendor-buyer supply chain model where the lead-time and ordering cost reduction act dependently. The lead time demand of a product follows a normal distribution. The manufacturing process is imperfect. During production run time, a certain percentage of defective products are produced, which are immediately reworked. Trade-credit financing has been taken into consideration. The goal of this study is to minimize the joint total expected cost by providing an inter-dependent reduction strategy of lead-time and ordering cost along with the determination of the optimal values of lead-time, number of deliveries, order lot size, ordering cost, lead-time crashing cost, and the joint total expected cost. A solution algorithm and a numerical example are presented to illustrate and establish the integrated model. This model can be used in textiles, automobiles and computers industries.

scholarly journals Model Persediaan Pemasok-Pembeli Dengan Produk Cacat Dan Kecepatan Produksi Terkontrol.

2016 ◽  
Vol 15 (2) ◽  
pp. 103
Author(s):  
NELITA PUTRI SEJATI ◽  
WAKHID AHMAD JAUHARI ◽  
CUCUK NUR ROSYIDI
Keyword(s):  
Sensitivity Analysis ◽  
Production Rate ◽  
Lead Time ◽  
Demand Uncertainty ◽  
Lot Size ◽  
Defective Items ◽  
Total Cost ◽  
Joint Economic Lot Size ◽  
Demand Rate ◽  
The Impact

Penelitian ini mengembangkan model persediaan Joint Economic Lot Size (JELS) pada pemasok tunggal pembeli tunggal untuk jenis produk tunggal dengan mempertimbangkan produk cacat dan tingkat produksi terkontrol. Tingkat permintaan pada pembeli bersifat stokastik. Pengiriman dilakukan dari pemasok ke pembeli dalam ukuran lot pengiriman yang sama dan lead time pengiriman bersifat tetap. Produk cacat yang ditemukan oleh pembeli pada saat inspeksi disimpan secara sementara di gudang pembeli hingga pengiriman berikutnya tiba untuk selanjutnya produk cacat dikembalikan kepada pemasok. Fungsi tujuan dari model ini adalah meminimasi total biaya persediaan gabungan pemasok pembeli dengan variabel keputusan, yaitu frekuensi pengiriman, periode review, dan tingkat produksi. Analisis sensitivitas dilakukan untuk melihat pengaruh perubahan parameter-parameter tertentu terhadap model. Hasil yang didapatkan dari analisis sensitivitas menunjukkan bahwa total biaya persediaan gabungan sensitif terhadap perubahan nilai parameter persentase produk cacat, ketidakpastian permintaan, dan permintaan. In this paper, we consider a joint economic lot size (JELS) model consisting of single vendor single buyerwith single product. We intend to study the impact of defective items and controllable production rate onthe model. The demand in buyer side is assumed to be stochastic. The delivery of lot from vendor to buyer is conducted under equal size shipment and the lead time is assumed to be constant. The defective items founded by the inspector in buyer side are carried in buyer’s storage until the next shipment and will be returned to the vendor. The goal of the proposed model is to determine optimal delivery frequency, review period and production rate by minimizing the joint total cost. A sensitivity analysis is performed to show the impact of the changes of the decision variables on model’s behavior. The result from the sensitivity analysis shows that the joint total cost is sensitive to the changes of defect rate, demand uncertainty and demand rate. 

scholarly journals A Two-Echelon Supply Chain Management With Setup Time and Cost Reduction, Quality Improvement and Variable Production Rate

Mathematics ◽  
2019 ◽  
Vol 7 (4) ◽  
pp. 328 ◽  
Author(s):  
Bikash Dey ◽  
Biswajit Sarkar ◽  
Sarla Pareek
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Production Rate ◽  
Cost Reduction ◽  
Lead Time ◽  
Setup Cost ◽  
Chain Management ◽  
The Impact ◽  
Variable Production ◽  
Setup Cost Reduction

This model investigates the variable production cost for a production house; under a two-echelon supply chain management where a single vendor and multi-retailers are involved. This production system goes through a long run system and generates an out-of-control state due to different issues and produces defective items. This model considers the reduction of the defective rate and setup cost through investment. A discrete investment for setup cost reduction and a continuous investment is considered to reduce the defective rate and to increase the quality of products. Setup and processing time are dependent on lead time in this model. The model is solved analytically to find the optimal values of the production rate, safety factors, optimum quantity, lead time length, investment for setup cost reduction, and the probability of the production process going out-of-control. An efficient algorithm is constructed to find the optimal solution numerically and sensitivity analysis is given to show the impact of different parameters. A case study and different cases are also given to validate the model.

scholarly journals Production rate and lot size-dependent lead time reduction strategies in a supply chain model with stochastic demand, controllable setup cost and trade-credit financing

2020 ◽  
Author(s):  
Monami Das Roy ◽  
Shib Sankar Sana
Keyword(s):  
Production Rate ◽  
Lead Time ◽  
Trade Credit ◽  
Chain Model ◽  
Lot Size ◽  
Setup Cost ◽  
Lead Time Reduction ◽  
Supply Chain Model ◽  
Reduction Strategies ◽  
Credit Financing

This study explores simultaneous reduction strategies of lead time and setup cost in a two-stage supply chain model under trade-credit financing. Lead time depends on avariable production rate and lot size. It consists of setup, production, and transportation time which are shortened to reduce lead time. Although double safety factors are considered to avoid stock-out; but still backorders take place as the demand during the lead time is stochastic.Setup cost is reduced by including an extra investment cost. In addition, the vendor offers a fixed credit period to the buyer to settle the account. The objective is to minimize the integrated expected total cost and optimize the order quantity, number of deliveries, setup and transportation time, setup cost, safety factor for the first batch, and the production rate. A multi-variable optimization technique is used for these purposes. Furthermore, a numerical example together with managerial insights is provided for the establishment and applicability of the proposed model.The numerical results show that the introduction of setup cost reduction and trade-credit financing along with lead time reduction is more beneficial by means of integrated expected total cost reduction.

scholarly journals PENGELOLAAN PERSEDIAAN PADA PT. X DENGAN PERMINTAAN STOKASTIK DAN VARIABEL LEAD TIME

2018 ◽  
Vol 1 (1) ◽  
pp. 30
Author(s):  
Silvi Rushanti Widodo ◽  
Heribertus Budi Santoso
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Lot Size ◽  
Joint Economic Lot Size

<p><em>PT. X (pemasok) merupakan suatu perusahaan manufaktur yang bergerak dibidang furniture rotan sintetik. PT. X memiliki permasalahan mengenai pengelolaan persediaan dengan distributornya (pembeli). PT. </em><em>X tidak menggunakan pendekatan sistem apapun untuk mengelola persediaannya saat ini, begitu pula yang dilakukan oleh distributornya. Hal ini tentunya akan menimbulkan permasalahan pada jaringan supply chain karena setiap pelaku bisnis tersebut hanya memikirkan sistem pengelolaan persediaan yang paling menguntungkan bagi dirinya sendiri. Hal ini sangat penting karena dalam suatu jaringan supply chain, keoptimalan pasokan produk pada salah satu pihak belum tentu menjadi optimal bagi pihak yang lain. Hal ini tentunya dapat menimbulkan masalah pada biaya produksi, penentuan jumlah cadangan produk (stock), dan waktu pasokan produk dari jaringan supply chain tersebut sehingga solusi terbaik demi keuntungan bersama akan sulit tercapai. Model Joint Economic Lot Size (JELS) mengintegrasikan pengelolaan persediaan dalam supply chain, Pada model ini pemasok atau produsen akan memproduksi sesuai dengan permintaan pembeli atau konsumen dari permintaannya yang tidak menentu dan hanya berupa kisaran jumlah atau stokastik dengan mempertimbangkan variabel lead time. Perusahaan melakukan pengiriman barang sesuai dengan permintaan konsumen sehingga biaya persediaan hanya optimal bagi salah satu pihak. Besarnya penghematan yang dapat dihasilkan dari metode JELS adalah sebesar 0,51% per tahun.</em></p>

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