scholarly journals Strategic Inventory Positioning in BOM with Multiple Parents Using ASR Lead Time

2016 ◽  
Vol 2016 ◽  
pp. 1-9 ◽  
Author(s):  
Jingjing Jiang ◽  
Suk-Chul Rim
Keyword(s):  
Lead Time ◽  
Solution Procedure ◽  
Optimal Position ◽  
Work In Process ◽  
Make To Order ◽  
Holding Cost ◽  
Total Inventory ◽  
Inventory Holding Cost ◽  
Inventory Holding ◽  
Optimal Set

In order to meet the lead time that the customers require, work-in-process inventory (WIPI) is necessary at almost every station in most make-to-order manufacturing. Depending on the station network configuration and lead time at each station, some of the WIPI do not contribute to reducing the manufacturing lead time of the final product at all. Therefore, it is important to identify the optimal set of stations to hold WIPI such that the total inventory holding cost is minimized, while the required due date for the final product is met. The authors have presented a model to determine the optimal position and quantity of WIPI for a given simple bill of material (S-BOM), in which any part in the BOM has only one immediate parent node. In this paper, we extend the previous study to the general BOM (G-BOM) in which parts in the BOM can have more than one immediate parent and present a new solution procedure using genetic algorithm.

scholarly journals Strategic WIP Inventory Positioning for Make-to-Order Production with Stochastic Processing Times

2017 ◽  
Vol 2017 ◽  
pp. 1-7 ◽  
Author(s):  
Jingjing Jiang ◽  
Suk-Chul Rim
Keyword(s):  
Lead Time ◽  
Processing Times ◽  
Work In Process ◽  
Make To Order ◽  
Stochastic Processing ◽  
Holding Cost ◽  
Inventory Holding Cost ◽  
Wip Inventory ◽  
Inventory Holding ◽  
Stochastic Processing Times

It is vital for make-to-order manufacturers to shorten the lead time to meet the customers’ requirements. Holding work-in-process (WIP) inventory at more stations can reduce the lead time, but it also brings about higher inventory holding cost. Therefore, it is important to seek out the optimal set of stations to hold WIP inventory to minimize the total inventory holding cost, while meeting the required due date for the final product at the same time. Since the problem with deterministic processing times at the stations has been addressed, as a natural extension, in this study, we address the problem with stochastic processing times, which is more realistic in the manufacturing environment. Assuming that the processing times follow normal distributions, we propose a solution procedure using genetic algorithm.

The Study of MTO Online Manufacturers' Guaranteed Delivery Time Model with Order Batching

2014 ◽  
Vol 933 ◽  
pp. 824-829
Author(s):  
Qiang Gang Zhu ◽  
Lei Liu ◽  
Yun Sheng Wang
Keyword(s):  
Lead Time ◽  
Delivery Time ◽  
Lot Size ◽  
Setup Cost ◽  
Time Model ◽  
Holding Cost ◽  
Inventory Holding Cost ◽  
Inventory Holding ◽  
Cost Of Transportation ◽  
Marketing Approach

To MTO on-line manufacturers, one of the most popular time-based competitive strategies is to widely advertise a uniform delivery time guarantee to all the customers. While providing time guarantee can be an effective marketing approach, it is critical for firms to reduce lead time to keep the promise. Decreasing lot size in batching is one of the most important levers to compress lead time in operation. This research expands existing blanket delivery-time guarantee models by integrating operation approach and marketing approach. The online manufacturers guaranteed delivery time model with order batching is established. Some analytic results are provided, and numerical examples are conducted to provide further insight into the problem. The effects of batch processing setup cost, unit inventory holding cost and unit compression cost of transportation time are analyzed. The results indicate that when batch processing setup cost decrease, unit inventory holding cost or unit compression cost of transportation time increase, the online manufacturer should decrease the lot size and shorten the guaranteed delivery time. The customers time and price sensitivities have adverse influences on the manufacturers delivery time decision.

A Mathematical Model for Tactical Operations Planning for Response-Base Supply Chains

2011 ◽  
pp. 241-252
Author(s):  
Sheu Hua Chen
Keyword(s):  
Mathematical Model ◽  
Supply Chains ◽  
Lead Time ◽  
Random Variable ◽  
Operations Planning ◽  
Proposed Model ◽  
Holding Cost ◽  
Inventory Holding Cost ◽  
Inventory Holding ◽  
The Relationship

This article explores the issue of lead-time in response-based supply chains. From a tactical viewpoint of response-based supply chains, the processing time for each stage is assumed to be a random variable since different practices exist in the selection pool of each stage under a specific lead-time requirement. The decision-maker must select suitable practices of operations for each stage to ensure that the lead-time meets a desired requirement. The relationship and the trade-off between the operating costs for the selected practices and the inventory holding cost of safety stock that is in turn affected by the lead-time are discussed. A mathematical model for planning the operations from a manufacturer viewpoint is proposed. The variation in practical situation for the proposed model is also addressed. A hypothetic example is provided to illustrate the effectiveness of the proposed model. With reference to the computational results, the effect of several parameters on the model’s optimal solutions was discussed.

scholarly journals The Inventory Routing Problem with Demand Moves

2021 ◽  
Vol 2 (1) ◽  
Author(s):  
Annelieke C. Baller ◽  
Said Dabia ◽  
Guy Desaulniers ◽  
Wout E. H. Dullaert
Keyword(s):  
Urban Areas ◽  
Research Literature ◽  
Inventory Routing ◽  
Routing Problem ◽  
Inventory Routing Problem ◽  
Solution Approach ◽  
Holding Cost ◽  
Inventory Holding Cost ◽  
Problem Instances ◽  
Inventory Holding

AbstractIn the Inventory Routing Problem, customer demand is satisfied from inventory which is replenished with capacitated vehicles. The objective is to minimize total routing and inventory holding cost over a time horizon. If the customers are located relatively close to each other, one has the opportunity to satisfy the demand of a customer by inventory stored at another nearby customer. In the optimization of the customer replenishments, this option can be included to lower total costs. This is for example the case for ATMs in urban areas where an ATM-user that wants to withdraw money could be redirected to another ATM. To the best of our knowledge, the possibility of redirecting end-users is new to the operations research literature and has not been implemented, but is being considered, in the industry. We formulate the Inventory Routing Problem with Demand Moves in which demand of a customer can (partially) be satisfied by the inventory of a nearby customer at a service cost depending on the quantity and the distance. We propose a branch-price-and-cut solution approach which is evaluated on problem instances from the literature. Cost improvements over the classical IRP of up to 10% are observed with average savings around 3%.

scholarly journals Dynamic sourcing strategies for supply disruptions under consumer stockpiling

2021 ◽  
Author(s):  
Shanshan Li ◽  
Yong He ◽  
Li Zhou
Keyword(s):  
Order System ◽  
Joint Decision ◽  
Sourcing Strategies ◽  
Make To Order ◽  
Sourcing Strategy ◽  
Holding Cost ◽  
Future Consumption ◽  
Inventory Holding ◽  
Relative Factors

AbstractThis paper considers a make-to-order system where production gets disrupted due to a random supply failure. To avoid potential stock-out risk and responding price increase during disruption, customers might decide to stockpile extra units for future consumption. We investigate the contingent sourcing strategy for the manufacturer to cope with the disruption. To this end, we first discuss the optimal post-disruption stockpiling decision for customers. In view of expected disruption duration, price rise, and inventory holding cost, three types of stockpiling behavior are analytically provided for the customers: non-stockpiling, gradual stockpiling, and instantaneous stockpiling. Next, a model is formulated to optimize the joint decision of contingent sourcing time and quantity, with the objective of maximizing profit expectation. Finally, by conducting numerical analysis, we generate further insights into the role of relative factors and provide specific managerial suggestions on how to adapt dynamic contingent sourcing strategies to alleviate different disruptions, under different market environments and customer behaviors.

Revenue Sharing in a Two-Stage Supply Chain with Linear Stepwise Unit Inventory Holding Cost

2011 ◽  
pp. 254-274
Author(s):  
Jing Hou ◽  
Amy Z. Zeng ◽  
Lindu Zhao
Keyword(s):  
Supply Chain ◽  
Revenue Sharing ◽  
Sequential Optimization ◽  
Inventory Level ◽  
Two Stage ◽  
Channel Relationship ◽  
Holding Cost ◽  
Inventory Holding Cost ◽  
Inventory Holding ◽  
Optimization Mechanism

In this chapter we focus on examining the coordination mechanisms for a two-stage supply chain comprising one supplier and one retailer. We consider such a channel relationship that the transaction quantity between the two members is sensitive to the supplier’s inventory level and that the supplier’s unit inventory holding cost has a linear stepwise structure. We devise a coordinated revenue-sharing contract with bargaining so that each party’s respective profit is better than that resulted from the simple sequential optimization mechanism. The key contract parameters, namely the supplier’s inventory level and the retailer’s revenue-sharing fraction, are obtained and analyzed. Numerical illustrations of the contracts are given and shed lights on how the supply chain should coordinate in order to gain better performance.

Contracts based on Inventory Cost Share for Supply Chain Coordination

2011 ◽  
pp. 126-138 ◽  
Author(s):  
Alejandra Gomez-Padilla
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
The Other ◽  
Inventory Cost ◽  
Cost Share ◽  
Pricing Scheme ◽  
Holding Cost ◽  
Inventory Holding Cost ◽  
Inventory Holding

In this document it is analyzed the importance of contracts for coordination between two companies in a supply chain. In the studied situation, one company, or supplier, supplies one product to the other company, who is a retailer. The companies are going to coordinate by two types of decisions: economic (concerning prices fixed on a contract), and physical exchange (concerning the inventory to be held). Two types of contracts will be presented: one contract with a simple pricing scheme and two contracts with inventory holding cost shared among the companies of the supply chain. The objective is to show that contracts with inventory holding cost share allow the two companies to efficiently coordinate the chain they form.

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