scholarly journals On the shortage control in a continuous review (Q, r) inventory policy using αL service-level

2021 ◽  
Vol 55 (5) ◽  
pp. 2785-2806
Author(s):  
Pablo Escalona ◽  
Diego Araya ◽  
Enrique Simpson ◽  
Mario Ramirez ◽  
Raul Stegmaier
Keyword(s):  
Service Level ◽  
Inventory Systems ◽  
Inventory Policy ◽  
Continuous Review ◽  
Arbitrary Time ◽  
Product Availability ◽  
Random Events ◽  
Replenishment Cycle ◽  
The Cost

Popular measures of product availability in inventory systems seek to control different aspects of stock shortages. However, none of them simultaneously control all aspects of shortages, because stock shortages in inventory systems are complex random events. This paper analyzes the performance of αL service measure, defined as the probability that stockouts do not occur during a replenishment cycle, to cover different aspects of stock shortages when used to design an optimal continuous review (Q, r) policy. We show that explicitly controlling the frequency of replenishment cycle stockouts, using the αL service-level, allows to implicitly control the size of the stockouts at an arbitrary time, the size of accumulated backorders at an arbitrary time, and the duration of the replenishment cycle stockouts. However, the cost of controlling the frequency of replenishment cycle stockouts is greater than the cost of controlling the size of stockouts and the duration of the replenishment cycle stockouts.

Comments on Two Models for Operating Two-Warehouse Inventory Systems with Deteriorating Items and Inflationary Effects

2011 ◽  
Vol 2 (2) ◽  
pp. 1-21
Author(s):  
Huachun Xiong ◽  
Jinxing Xie ◽  
Bo Niu
Keyword(s):  
Infinite Horizon ◽  
Planning Horizon ◽  
Inventory Systems ◽  
Traditional Model ◽  
Present Value ◽  
Total Cost ◽  
Demand Rate ◽  
Replenishment Cycle ◽  
The Cost ◽  
Infinite Planning Horizon

This paper deals with the two-warehouse partial backlogging inventory problems under inflation for a deteriorating product with a constant demand rate over an infinite horizon. In contrast to the traditional model in which each replenishment cycle starts with an instant replenishment and ends with shortages, an alternative model is proposed in recent literature in which each cycle starts with shortages. It is proven to be less expensive to operate than the traditional model in terms of the present value of the cost per unit time. The present paper points out that the criteria of minimizing the cost per unit time is unreasonable when the inflationary effect is taken into consideration, and instead, the criteria of minimizing the present value of the total cost over the whole infinite planning horizon should be used. The objective functions of these two models are changed and proved that the model with shortages at the start of the cycle is less expensive to operate than the traditional model in terms of the present value of the total cost, but the optimal solutions of the models minimizing the cost per unit time indicate significantly higher total costs.

Comments on Two Models for Operating Two-Warehouse Inventory Systems with Deteriorating Items and Inflationary Effects

2013 ◽  
pp. 349-370
Author(s):  
Huachun Xiong ◽  
Jinxing Xie ◽  
Bo Niu
Keyword(s):  
Infinite Horizon ◽  
Planning Horizon ◽  
Inventory Systems ◽  
Traditional Model ◽  
Present Value ◽  
Total Cost ◽  
Demand Rate ◽  
Replenishment Cycle ◽  
The Cost ◽  
Infinite Planning Horizon

This paper deals with the two-warehouse partial backlogging inventory problems under inflation for a deteriorating product with a constant demand rate over an infinite horizon. In contrast to the traditional model in which each replenishment cycle starts with an instant replenishment and ends with shortages, an alternative model is proposed in recent literature in which each cycle starts with shortages. It is proven to be less expensive to operate than the traditional model in terms of the present value of the cost per unit time. The present paper points out that the criteria of minimizing the cost per unit time is unreasonable when the inflationary effect is taken into consideration, and instead, the criteria of minimizing the present value of the total cost over the whole infinite planning horizon should be used. The objective functions of these two models are changed and proved that the model with shortages at the start of the cycle is less expensive to operate than the traditional model in terms of the present value of the total cost, but the optimal solutions of the models minimizing the cost per unit time indicate significantly higher total costs.

scholarly journals An Inventory Model for Deteriorating Drugs with Stochastic Lead Time

2018 ◽  
Vol 15 (12) ◽  
pp. 2772 ◽  
Author(s):  
Jian Li ◽  
Lu Liu ◽  
Hao Hu ◽  
Qiuhong Zhao ◽  
Libin Guo
Keyword(s):  
Shelf Life ◽  
Inventory Management ◽  
Lead Time ◽  
Service Level ◽  
Inventory Model ◽  
Effective Management ◽  
Product Availability ◽  
Stochastic Lead Time ◽  
Random Lead Time ◽  
The Right

Inventory management of deteriorating drugs has attracted considerable attention recently in hospitals. Drugs are a kind of special product. Two characteristics of some drugs are the shorter shelf life and high service level. This causes hospitals a great deal of difficulty in inventory management of perishable drugs. On one hand, hospitals should increase the drug inventory to achieve a higher service level. On the other hand, hospitals should decrease the drug inventory because of the short shelf life of drugs. An effective management of pharmaceuticals is required to ensure 100% product availability at the right time, at the right cost, in good conditions to the right customers. This requires a trade-off between shelf-life and service level. In addition, many uncontrollable factors can lead to random lead time of drugs. This paper focuses on deteriorating drugs with stochastic lead time. We have established a stochastic lead time inventory model for deteriorating drugs with fixed demand. The lead time obeyed a certain distribution function and shortages were allowed. This model also considered constraints on service level, stock space and drug shelf life. Through the analysis of the model, the shelf life of drugs and service level were weighted in different lead time distributions. Empirical analysis and sensitivity analysis were given to get reach important conclusions and enlightenment.

scholarly journals EXCHANGE CURVE-BASED INVENTORY POLICY ANALYSIS OF NON-REUSABLE INDUSTRIAL PACKAGING IN PRODUCTION

2021 ◽  
Vol 24 (1) ◽  
pp. 43-49
Author(s):  
Agota Banyaine Toth ◽  
Keyword(s):  
Cost Efficiency ◽  
Computation Method ◽  
Analysis Method ◽  
Packaging System ◽  
Inventory Policy ◽  
Inventory Investment ◽  
Micro Level ◽  
Quality Of Products ◽  
The Cost

The well-chosen inventory policy has a great impact on the performance of production and logistics processes, because it can influence not only the reliability, the cost efficiency, and the sustainability of the processes and resources, but packaging system can force the quality of products and processes. Within the frame of this article an exchange curve-based analysis method of packaging related inventory policy is described. This analysis method makes it possible to highlight the problems in inventory policy and find an improve solution in both macro- and micro-level. The computation method is based on the exchange of annual order cost and average inventory investment, especially in the case of economic order quantity-based packaging order policies.

Operational Cost of Running Real-Time Mobile Cloud Applications

2015 ◽  
pp. 294-321 ◽  
Author(s):  
Ovunc Kocabas ◽  
Regina Gyampoh-Vidogah ◽  
Tolga Soyata
Keyword(s):  
Real Time ◽  
Large Scale ◽  
Service Level ◽  
Cloud Services ◽  
Mobile Cloud ◽  
Cost Models ◽  
Operational Cost ◽  
Resource Requirements ◽  
The Cost ◽  
Cloud Applications

This chapter describes the concepts and cost models used for determining the cost of providing cloud services to mobile applications using different pricing models. Two recently implemented mobile-cloud applications are studied in terms of both the cost of providing such services by the cloud operator, and the cost of operating them by the cloud user. Computing resource requirements of both applications are identified and worksheets are presented to demonstrate how businesses can estimate the operational cost of implementing such real-time mobile cloud applications at a large scale, as well as how much cloud operators can profit from providing resources for these applications. In addition, the nature of available service level agreements (SLA) and the importance of quality of service (QoS) specifications within these SLAs are emphasized and explained for mobile cloud application deployment.

An Approach to Integrate Commonality and Product Family Design With Inventory Decisions

2019 ◽  
Vol 141 (3) ◽  
Author(s):  
Shun Takai
Keyword(s):  
Product Family ◽  
Service Level ◽  
Simultaneous Optimization ◽  
Product Family Design ◽  
Lot Size ◽  
Expected Number ◽  
Inventory Cost ◽  
Beverage Containers ◽  
Replenishment Cycle ◽  
Inventory Decisions

Commonality, or the use of the same components among products in a product family, has been considered an effective approach to design a product family. By implementing commonality, a firm can reduce the number of distinct components, component inventory, and inventory cost. However, product design may change and product cost may increase due to using common components that may require different interface conditions and be more expensive than the initially considered components. While the benefits and challenges are well recognized, simultaneous optimization of commonality, product family design, and inventory decisions has not been comprehensively studied. In this paper, we present an approach to integrate commonality, product family design, and inventory decisions by incorporating inventory-related costs in the profit formula. In the proposed approach, (1) commonality matrix is defined to assign product demands to components and component costs to products, (2) continuous inventory review policy is used to calculate safety inventory, (3) joint ordering is implemented to calculate inventory-replenishment lot size and cycle inventory, and (4) cycle service level (CSL) and expected number of component shortage per replenishment cycle (ESC) are utilized to calculate inventory-understock costs. The design of three beverage containers is used as an illustrative example to demonstrate the proposed approach, and sensitivity analysis is performed to contrast commonality and product family design of the three beverage containers with and without incorporating inventory decisions.

Sign in / Sign up

Export Citation Format

Share Document