Comparative multi criteria analysis and dependent optimisation through integrated supply chain

2014 ◽  
Vol 63 (8) ◽  
pp. 1046-1069 ◽  
Author(s):  
Sanjay Sharma ◽  
Akshat Sisodia
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Service Level ◽  
Inventory Level ◽  
Inventory Policies ◽  
Inventory Cost ◽  
Content Type ◽  
Customer Service Level ◽  
Integrated Supply Chain ◽  
Different Levels

Purpose – The purpose of this paper is to compare various inventory policies and their effect on various performance metrics at different levels of a multi stage supply chain. Later the model is integrated to include optimization of entire supply chain through implementation of collaborative supply chain model. Design/methodology/approach – Alternative inventory policies have been developed at different echelons and a comparison reflecting the usability on various factors such as inventory level, inventory cost and service level is presented so as to support the decision-making process. Various inventory policies such as economic order quantity, periodic ordering (T, M) and stock to demand have been considered. Along with the basic assumptions; lead time, demand variability, variability in demand during lead time, stock out costs have also been included to make the model more applicable to practical situations. Findings – After the selection of most appropriate inventory policy at each level through a decision matrix, the total cost of operating such a supply chain is calculated along with other parameters such as service level and inventory turns. The approach is of aggregating the optimized value at each echelon referred to as aggregated supply chain in the paper. Then the concept of integrated supply chain is introduced which optimizes the supply chain as a whole, rather than aggregating local optima. The comparison is made between the two approaches that prove the integrated supply chain's superiority. Furthermore, dependent optimization is run as it is not practically possible for each echelon to optimize at the same time. Originality/value – Each echelon is allowed to optimize at a time and other echelons assume corresponding values. This final comparative multi criterion analysis is based on the three factors, i.e. inventory cost, customer service level and inventory turnover with different weights assigned to each factor at different levels of a supply chain. Finally a consolidation of results is made to reflect the overall preference which proves that an integrated supply chain best serves all the parameters combined together.

Investigating the value of reducing errors in inventory information from a supply chain perspective

Kybernetes ◽  
2015 ◽  
Vol 44 (2) ◽  
pp. 176-185 ◽  
Author(s):  
Kazim Sari
Keyword(s):  
Supply Chain ◽  
Customer Service ◽  
Lead Time ◽  
Service Level ◽  
Supply Chain Collaboration ◽  
Content Type ◽  
Useful Knowledge ◽  
Lead Time Reduction ◽  
Customer Service Level ◽  
Time Reduction

Purpose – The purpose of this paper is to investigate the value of reducing errors in inventory information from a supply chain perspective. To this end, the benefits of reducing errors in inventory information are compared with those of lead time reduction and supply chain collaboration. Design/methodology/approach – A simulation model is constructed to perform the analysis. Findings – Results show that lead time reduction is the most important strategy for a supply chain in reducing total supply chain cost. In terms of customer service level, on the other hand, strategy of reducing errors in inventory information is observed as the most considerable strategy. However, the results for supply chain collaboration are somewhat unexpected. Namely, in spite of its popularity, supply chain collaboration provides very limited contribution to the supply chain. Practical implications – This research provides useful knowledge for the managers of a business enterprise in prioritizing various supply chain strategies. Originality/value – In supply chain management literature, greater emphasis is given to lead time reduction and supply chain collaboration than dealing with errors in inventory information. This research makes it clear that errors in inventory information should not be underestimated.

Retail supply chain service levels: the role of inventory storage

2016 ◽  
Vol 29 (6) ◽  
pp. 887-902 ◽  
Author(s):  
Asif Salam ◽  
Farhad Panahifar ◽  
P.J. Byrne
Keyword(s):  
Supply Chain ◽  
Customer Service ◽  
Service Level ◽  
Retail Industry ◽  
Inventory Level ◽  
Content Type ◽  
Service Levels ◽  
Product Availability ◽  
Customer Service Level ◽  
The Relationship

Purpose In today’s competitive retail industry the most critical success factor is customer service which is indicated by product availability. It is argued that in the retail industry, product availability is an important measure of quality. The single most vital decision that every retailer needs to make is, how to maximize service level while keeping minimum inventory level. The purpose of this paper is to explain and demonstrate the relationship between inventory level and customer service level. Design/methodology/approach This study examines an inventory system utilizing a simulation model based on company data obtained from a retail fast-moving-consumer goods chain operating in Thailand. Findings The results suggest that the achievement of a responsive service level is dependent on managing an efficient supply chain in addition to logistics cost reductions. The findings also reveal the effect the inventory level has on the service level. From the findings of this study, demand variability and service level have been found to have the most significant influence on the inventory level. From the findings, it can also be shown that real and accurate information is very important for service supply chains. Practical implications The paper promotes the importance of having an appropriate inventory management policy for a retail chain which should be driven by retail companies in order to better balance inventory and service levels. Originality/value The relationship between the inventory level and customer service level lead to different outcomes at different combinations of inventory and service levels. Significant relationships were found between inventory and service levels.

Supply chain management and market responsiveness: a simulation study

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdulqadir Rahomee Ahmed Aljanabi ◽  
Karzan Mahdi Ghafour
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Supply And Demand ◽  
Service Level ◽  
Distribution Centers ◽  
Safety Stock ◽  
Content Type ◽  
Product Availability ◽  
Market Responsiveness ◽  
Number Of Customers

Purpose This study aims to provide a practical solution to the relationship between supply chain (SC) integration and market responsiveness (MR). A method is proposed to integrate SC and MR parameters, namely, product supply and demand in the context of low-value commodities (e.g. cement). Design/methodology/approach Simulation and forecasting approaches are adopted to develop a potential procedure for addressing demand during lead time. To establish inventory measurements (safety stock and reorder level) and increase MR and the satisfaction of customer’s needs, this study considers a downstream SC including manufacturers, depots and central distribution centers that satisfies an unbounded number of customers, which, in turn, transport the cement from the industrialist. Findings The demand during lead time is shown to follow a gamma distribution, a rare probability distribution that has not been considered in previous studies. Moreover, inventory measurements, such as the safety stock, depending on the safety factor under a certain service level (SL), which enables the SC to handle different responsiveness levels in accordance with customer requests. In addition, the quantities of the safety stock and reorder point represent an optimal value at each position to avoid over- or understocking. The role of SC characteristics in MR has largely been ignored in existing research. Originality/value This study applies SC flexibility analyzes to overcome the obstacles of analytical methods, especially when the production process involves probabilistic variables such as product availability and demand. The use of an efficient method for analyzing the forecasting results is an unprecedented idea that is proven efficacious in investigating non-dominated solutions. This approach provides near-optimal solutions to the trade-off between different levels of demand and the SC responsiveness (SLs) with minimal experimentation times.

Two-Echelon Inventory Stochastic Model of Supply Chain Based on Service Level Constraints

2014 ◽  
Vol 971-973 ◽  
pp. 2448-2451
Author(s):  
Da Li Jiang ◽  
Guang Fu Zhu ◽  
De Li
Keyword(s):  
Supply Chain ◽  
Stochastic Model ◽  
Service Level ◽  
Inventory Model ◽  
Inventory Level ◽  
Effective Algorithm ◽  
Inventory Cost ◽  
Total Inventory

The study on multi-echelon inventory of supply chain is becoming more and more important in E-business era. This paper proposes a two-echelon inventory model with one supplier and several retailers, in which a certain service level has to be satisfied and the goal is to minimize the total inventory cost. In addtion it puts forward an effective algorithm for this model to obtain the optimal replenishment period and inventory level of each supply chain node.

scholarly journals System Dynamics Model for VMI&TPL Integrated Supply Chains

2013 ◽  
Vol 2013 ◽  
pp. 1-17 ◽  
Author(s):  
Guo Li ◽  
Xiaojing Wang ◽  
Zhaohua Wang
Keyword(s):  
Supply Chain ◽  
Risk Sharing ◽  
Operation Mode ◽  
Bullwhip Effect ◽  
Service Level ◽  
Inventory Level ◽  
Dynamics Model ◽  
Integrated Operation ◽  
Integrated Supply Chain

This paper establishes VMI-APIOBPCS II model by extending VMI-APIOBPCS model from serial supply chain to distribution supply chain. Then TPL is introduced to this VMI distribution supply chain, and operational framework and process of VMI&TPL integrated supply chain are analyzed deeply. On this basis VMI-APIOBPCS II model is then changed to VMI&TPL-APIOBPCS model and VMI&TPL integrated operation mode is simulated. Finally, compared with VMI-APIOBPCS model, the TPL’s important role of goods consolidation and risk sharing in VMI&TPL integrated supply chain is analyzed in detail from the aspects of bullwhip effect, inventory level, service level, and so on.

Modeling of an Inventory System with Variable Demands and Lead Times using a Fuzzy Approach

2016 ◽  
pp. 133-151
Author(s):  
Vijay Kumar ◽  
Pravin Kumar
Keyword(s):  
Customer Service ◽  
Lead Time ◽  
Service Level ◽  
Research Topic ◽  
Lead Times ◽  
Inventory Cost ◽  
Safety Stock ◽  
Customer Service Level ◽  
Optimum Order ◽  
Total Inventory

Inventory modeling has always been an innovative research topic for the researchers. It is concerned with minimization of the total inventory cost and maximization of the service level with minimum inventory. In the real world, the demand is always variable; and also the lead time of supply of an item cannot be always fixed due to some unavoidable circumstances. This chapter is focused on an inventory model with shortages where demand quantity and lead time are considered as variable and represented by triangular fuzzy numbers. An expression for optimum order size, reorder point, safety stock and fuzzy total safety stock cost is developed for a fixed customer service level. This model may help the manager to minimize the inventory cost with a maximum service level under the environment of uncertainty and vague information.

scholarly journals Service-oriented performance of inventory models with partial information on unimodal demand lead-time distributions

2020 ◽  
Author(s):  
Gerrit K. Janssens ◽  
Lotte Verdonck ◽  
Katrien Ramaekers
Keyword(s):  
Customer Service ◽  
Lead Time ◽  
Partial Information ◽  
Service Level ◽  
Inventory Level ◽  
Worst Case ◽  
Point Distribution ◽  
Safety Stock ◽  
Demand Distribution ◽  
Customer Service Level

Facing uncertainty in demand, companies try to avoid stock-outs by holding safety inventories, depending on a pre-set customer service level. The knowledge of the demand distribution during lead-time serves to determine the safety inventory level. Many times the distribution is not fully known, except maybe for its range, mean or variance. However literature shows that the performance of holding safety stock strongly depends on the characteristics of the distribution. One option is to protect against the worst case distribution given some information like range or moments. But this worst case is a two-point distribution, bringing unbelief to managers that such an occurrence would ever appear. Mostly they share the opinion that the demand distribution is unimodal. This research develops a technique to derive the safety stock for unimodal demand distributions of which the mode either is known or can be estimated. In this way, the managers obtain solutions to the decision problem including a higher belief that the related type of distribution might appear in practice.

Inventory model in a four-echelon integrated supply chain: modeling and optimization

2017 ◽  
Vol 12 (4) ◽  
pp. 739-762 ◽  
Author(s):  
Abolfazl Gharaei ◽  
Seyed Hamid Reza Pasandideh ◽  
Alireza Arshadi Khamseh
Keyword(s):  
Supply Chain ◽  
Nonlinear Model ◽  
Interior Point ◽  
Inventory Model ◽  
Inventory Cost ◽  
Content Type ◽  
Multi Stage ◽  
Total Inventory ◽  
Integrated Supply Chain ◽  
Stochastic Constraints

Purpose The main purpose is to minimize the total inventory cost of chain, whereas the stochastic constraints are satisfied. In other words, the goal is to find optimum agreed stockpiles and period length for products to minimize the total inventory cost of the chain while the stochastic constraints are fulfilled. Design/methodology/approach This paper designs and optimizes an integrated inventory model in a four-echelon supply chain that contains a supplier, a producer, a wholesaler and multiple retailers. All four levels agree with each other to make an integrated inventory system. Products in this model have a multi-stage production process, and the model is bounded by multiple stochastic constraints. The problem model is nonlinear and large. So, the interior point method as an effective algorithm is used for solving the recent convex nonlinear model. Two numerical examples are solved to demonstrate the application of this methodology and to evaluate the performance of the proposed approach. Findings The findings showed the model is applicable for real-world supply chain problems in the cases that echelons are going to do executive external integration. Also, the Interior Point algorithm has a satisfactory performance and a high efficiency in terms of optimum solution for solving nonlinear and large models. Originality/value The authors designed and optimized the inventory cost in a four-level integrated supply chain in stochastic conditions. The new decision variables, number of chain levels, multi-products, stochastic constraints and multi-stage products in four-level integrated supply chain are other novelties of this paper. The authors provided an efficient algorithm for solving a large-scale and nonlinear model in this research, too.

What should be lean buffer threshold for the forward-reserve warehouse?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bhavin Shah
Keyword(s):  
Mathematical Model ◽  
Customer Service ◽  
Value Added ◽  
Service Level ◽  
Buffer Size ◽  
Value Stream Mapping ◽  
Content Type ◽  
Customer Service Level ◽  
The Impact ◽  
Just Right

PurposeThe assorted piece-wise retail orders in a cosmetics warehouse are fulfilled through a separate fast-picking area called Forward Buffer (FB). This study determines “just-right” size of FB to ensure desired Customer Service Level (CSL) at least storage wastages. It also investigates the impact of FB capacity and demand variations on FB leanness.Design/methodology/approachA Value Stream Mapping (VSM) tool is applied to analyse the warehouse activities and mathematical model is implemented in MATLAB to quantify the leanness at desired CSL. A comprehensive framework is developed to determine lean FB buffer size for a Retail Distribution Centre (RDC) of a cosmetics industry.FindingsThe CSL increases monotonically; however, the results concerning spent efforts towards CSL improvement gets diminished with raised demand variances. The desired CSL can be achieved at least FB capacity and fewer Storage Waste (SW) as it shifts towards more lean system regime. It is not possible to improve Value Added (VA) time beyond certain constraints and therefore, it is recommended to reduce Non-Value Added (NVA) order processing activities to improve leanness.Research limitations/implicationsThis study determines “just-right” capacity and investigates the impact of buffer and demand variations on leanness. It helps managers to analyse warehouse processes and design customized distribution policies in food, beverage and retail grocery warehouse.Practical implicationsProposed buffering model offers customized strategies beyond pre-set CSL by varying it dynamically to reduce wastages. The mathematical model deriving lean sizing and mitigation guidelines are constructive development for managers.Originality/valueThis research provides an inventive approach of VSM model and Mathematical algorithm endorsing lean thinking to design effective buffering policies in a forward warehouse.

scholarly journals A literature review on multi-echelon inventory management: the case of pharmaceutical supply chain

2018 ◽  
Vol 200 ◽  
pp. 00013 ◽  
Author(s):  
Nouçaiba Sbai ◽  
Abdelaziz Berrado
Keyword(s):  
Supply Chain ◽  
Customer Service ◽  
Inventory Management ◽  
Raw Materials ◽  
Integrated Approach ◽  
Service Level ◽  
Pharmaceutical Products ◽  
Management Problem ◽  
Pharmaceutical Supply Chain ◽  
Customer Service Level

Inventory management remains a key challenge in supply chain management. Many companies recognize the benefits of a good inventory management system. An effective inventory management helps reaching a high customer service level while dealing with demand variability. In a complex supply chain network where inventories are found across the entire system as raw materials or finished products, the need for an integrated approach for managing inventory had become crucial. Modelling the system as a multi-echelon inventory system allows to consider all the factors related to inventory optimization. On the other hand, the high criticality of the pharmaceutical products makes the need for a sophisticated supply chain inventory management essential. The implementation of the multi-echelon inventory management in such supply chains helps keeping the stock of pharmaceutical products available at the different installations. This paper provides an insight into the multi-echelon inventory management problem, especially in the pharmaceutical supply chain. A classification of several multi-echelon inventory systems according to a set of criteria is provided. A synthesis of multiple multi-echelon pharmaceutical supply chain problems is elaborated.

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