scholarly journals Exploiting Random Lead Times for Significant Inventory Cost Savings

2021 ◽  
Author(s):  
Alexander L. Stolyar ◽  
Qiong Wang
Keyword(s):  
Inventory Management ◽  
Lead Time ◽  
Cost Savings ◽  
Distributed Networks ◽  
Lead Times ◽  
Supply Chain Performance ◽  
Inventory Cost ◽  
Inventory Costs ◽  
Simulation Results ◽  
Base Stock Policies

Taking Advantage of the Lead Time Randomness in Supply Chains Randomness in lead times is a major—and increasingly important—issue of inventory management, as a variety of risk factors motivate companies to diversify their supply sources and rely on distributed networks of suppliers. In “Exploiting Random Lead Times for Significant Inventory Cost Savings,” A. Stolyar and Q. Wang show that, surprisingly, instead of being a damaging factor to supply chain performance, randomness may be harnessed for potentially very substantial reductions of inventory costs. Specifically, the theoretical analysis and simulation results in the paper demonstrate that, under certain conditions, appropriately designed novel policies can significantly outperform the conventional base stock policies.

scholarly journals Pengembangan Model Vendor Managed Inventory dengan Banyak Retailer yang Mempertimbangkan Ketidakpastian Lead Times

2018 ◽  
Vol 7 (1) ◽  
pp. 41
Author(s):  
Carles Sitompul ◽  
Paulina Ariningsih ◽  
Ida Bagus Deva Narswara Santosa
Keyword(s):  
Inventory Management ◽  
Lead Time ◽  
Mathematical Formulation ◽  
Lead Times ◽  
Approximation Model ◽  
Vendor Managed Inventory ◽  
Inventory Cost ◽  
Inventory Management System ◽  
Total Inventory ◽  
The Cost

<p><em>An inventory management system in supply chains called Vendor Managed Inventory (VMI) is very promising due to the cost efficiency resulted from implementing such system. This research aims to develop a vendor managed inventory for multiple retailers. The model also takes into account lead time uncertainties from vendor to its retailers. A mathematical formulation for VMI with multiple retailers is first developed using deterministic lead times.  Subsequently, lead times uncertainties are then taken into account where modes lead times are broken into two components: modes and delays, each with their respective probabilities. In turn, an approximation model is used to solve the problem because the complexity aroused from the model is difficult to solve using analytical methods. It is shown that the proposed approximation method is able to solve VMI problem with multiple retailers and uncertain lead times.  Furthermore, the total inventory cost is significantly reduced when compared to the usual economic order quantity method because stockouts are less frequent. </em></p>

scholarly journals The Impact of Lead Time Uncertainty on Supply Chain Performance Considering Carbon Cost

2019 ◽  
Vol 11 (22) ◽  
pp. 6457
Author(s):  
Li ◽  
Fei ◽  
Zhou ◽  
Gajpal ◽  
Chen
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Lead Times ◽  
Supply Chain Performance ◽  
Chain Model ◽  
Carbon Cost ◽  
Inventory Costs ◽  
Time Uncertainty ◽  
Supply Chain Model ◽  
Lead Time Uncertainty

In supply chain operation practices, lead time uncertainty is a common management issue. Uncertain lead time can lead to increased inventory costs and unstable service levels, which will directly affect the overall operation performance of the supply chain. While considering environmental performance in supply chain, it is important to understand how an uncertain lead time will affect sustainable performance. In this paper, we constructed a supply chain model with stochastic lead time and explored the relationship between uncertain lead time and supply chain performance. We considered carbon cost, inventory cost, and service level as a supply chain performance. System dynamics methodology was employed to observe and explore the dynamic change trend of the overall performance in the complicated supply chain model. This was done under both different levels of lead time standard deviation and different order policies. The results demonstrate how stochastic lead times can significantly increase inventory costs and carbon costs. Therefore, we propose appropriate ordering policies which mitigate the negative impacts of stochastic lead times.

scholarly journals PENGENDALIAN PERSEDIAAN BARANG DAGANG MENGGUNAKAN METODE ECONOMIC ORDER QUANTITY

2021 ◽  
Vol 3 (2) ◽  
Author(s):  
Fanny Andriani Setiawan ◽  
Margarita Ekadjaja ◽  
Yustina Peniyanti
Keyword(s):  
Inventory Management ◽  
Cost Savings ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Cost Calculation ◽  
Order Quantity ◽  
Inventory Cost ◽  
Inventory Costs ◽  
Total Inventory ◽  
The Cost

Inventory control can be done by reducing the cost of inventory and the number of ordering frequencies economically. PT Tanjung Globalindo Utama or Toko TODA is an oil and accessory retail store that provides various oil needs. Some of the problems are late delivery of goods from suppliers, so that for several days the company cannot operate optimally. On the other hand, the company has also experienced an excess inventory of merchandise, so the company wastes due to excess inventory of merchandise which in turn increases inventory costs. The Community Service Team (PKM) provides a solution for TODA Stores in overcoming their problems by providing training in inventory management in the Economic Order Quantity (EOQ) method. PKM activities were carried out on May 22, 2020. Participation of partners in the PKM program is to participate in discussions, provide historical data, and convey targets. The output is that the TODA Shop can determine the amount and schedule for the procurement of merchandise economically. The result is that Toko Toda begins to understand the importance of controlling inventory so that inventory costs are not too high. Proposed procedures for purchasing merchandise inventory were received and started to be carried out with monitoring from the relevant PKM Team. Based on the calculation simulation results and discussion shows that the use of the EOQ method in controlling merchandise inventory at Toda Stores is very efficient, seen from the amount of cost savings obtained if the total inventory cost calculation uses the EOQ methodABSTRAK:Pengendalian persediaan dapat dilakukan dengan menekan biaya persediaan dan jumlah frekwensi pemesanan secara ekonomis. PT Tanjung Globalindo Utama atau Toko TODA adalah Toko retail oli dan aksesori yang menyediakan berbagai kebutuhan oli. Beberapa permasalahan yang sering dialami adalah keterlambatan pengiriman barang dari supplier, sehingga selama beberapa hari perusahaan tidak dapat beroperasi maksimal. Disisi lain perusahaan juga pernah mengalami kelebihan persediaan barang dagang, sehingga perusahaan melakukan pemborosan akibat kelebihan persediaan barang dagang yang pada akhirnya meningkatkan biaya persediaan. Tim Pengabdian Kepada Masyarakat (PKM) memberikan solusi untuk Toko TODA dalam mengatasi permasalahannya dengan memberikan pelatihan tata kelola persediaan metode Economic Order Quantity (EOQ). Kegiatan PKM telah dilaksanakan pada tanggal 22 Mei 2020. Partisipasi mitra dalam program PKM adalah ikut serta dalam berdiskusi, memberikan data-data historikal, dan menyampaikan target yang hendak dicapai. Target luaran dari kegiatan PKM ini adalah Toko TODA dapat menentukan jumlah dan jadwal pengadaan barang dagang secara ekonomis. Hasil kegiatan PKM adalah Toko Toda mulai memahami pentingnya pengendalian persediaan barang dagang agar biaya persediaan tidak terlalu besar. Usulan prosedur pembelian persediaan barang dagang diterima dan mulai dijalankan dengan pemantauan dari Tim PKM terkait. Berdasarkan hasil simulasi perhitungan dan diskusi menunjukkan bahwa penggunaan metode EOQ dalam mengendalikan persediaan barang dagang pada Toko Toda sangatlah efisien terlihat dari besarnya penghematan biaya yang diperoleh jika perhitungan total biaya persediaan menggunakan metode EOQ.

scholarly journals Inventory model for deteriorating items with negative exponential demand, probabilistic deterioration and fuzzy lead time under partial back logging

2020 ◽  
Vol 30 (3) ◽  
Author(s):  
Nabendu Sen ◽  
Sumit Saha
Keyword(s):  
Inventory Management ◽  
Lead Time ◽  
Probability Distributions ◽  
Optimal Strategies ◽  
Inventory Model ◽  
Deteriorating Items ◽  
Optimal Time ◽  
Inventory Cost ◽  
Total Inventory ◽  
Negative Exponential

The effect of lead time plays an important role in inventory management. It is also important to study the optimal strategies when the lead time is not precisely known to the decision makers. The aim of this paper is to examine the inventory model for deteriorating items with fuzzy lead time, negative exponential demand, and partially backlogged shortages. This model is unique in its nature due to probabilistic deterioration along with fuzzy lead time. The fuzzy lead time is assumed to be triangular, parabolic, trapezoidal numbers and the graded mean integration representation method is used for the defuzzification purpose. Moreover, three different types of probability distributions, namely uniform, triangular and Beta are used for rate of deterioration to find optimal time and associated total inventory cost. The developed model is validated numerically and values of optimal time and total inventory cost are given in tabular form, corresponding to different probability distribution and fuzzy lead-time. The sensitivity analysis is performed on variation of key parameters to observe its effect on the developed model. Graphical representations are also given in support of derived optimal inventory cost vs. time.

scholarly journals Inventory Management Practices and Supply Chain Performance of Antiretroviral Medicines in Public Hospitals in Nyamira County, Kenya

2021 ◽  
Vol 4 (2) ◽  
pp. 257-268
Author(s):  
Anyona Johnson ◽  
Karimi Peter ◽  
Maru Shital
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Lead Time ◽  
Management Practices ◽  
Performance Metrics ◽  
Public Hospitals ◽  
Supply Chain Performance ◽  
Key Informant ◽  
Wastage Rate ◽  
Reporting Rates

BackgroundUnreliable supply systems have plagued the provision of an uninterrupted supply of life- saving medicines in many developing countries, with antiretroviral (ARV) medicines having the worst repercussions.ObjectiveTo identify the inventory management practices used, evaluate the supply chain performance, and determine the challenges affecting inventory management of ARV medicines in public hospitals.MethodsThe study used a descriptive cross-sectional design, gathering snapshot data on inventory management practices happening in all the 8 public hospitals across Nyamira County. Data collection was done using structured questionnaires, key informant interviews, checklists and data from the national health information system.ResultsThe response rate was 97.3% for the questionnaires and 100% for the key informant interviews. The prevailing inventory management practices were: use of scheduled inventory control model (80.95%), forecasting demand using previous consumption data (100%), keeping accurate and updated stock records for each commodity (92.31%), having essential logistical data in reports (100%), including safety stock (61.54%) when ordering and keeping ARV medicines in dedicated stores (75%). With the exception of order lead time (17.98 days), the other supply chain performance metrics namely stock out rate (52.12%), stock wastage rate (43.2%), and reporting rates (70.84%) were found to be deficient. The challenges mostly affecting inventory management included inadequate staff and training, lack of proper storage, and unreliable supply of medicines.ConclusionInventory management practices were according to the recommended best approaches despite various challenges. The supply chain performance metrics evaluated, with the exception of order lead time, were all found to be unsatisfactory owing to the high stock out rates, below par reporting rates and high stock wastage rate due to expiries discovered. Adoption of an electronic inventory system, use of data for decision making, dedicated storage of ARV medicines, and inclusion of buffer stock, are some strategies to improve inventory management.Rwanda J Med Health Sci 2021;4(2): 257-268

Switchgear Component Commonality Design Method Considering Delivery Lead-Time and Inventory Level

2007 ◽  
Author(s):  
Haruki Kariya ◽  
Kazuhiro Izui ◽  
Shinji Nishiwaki ◽  
Masataka Yoshimura ◽  
Yoshiya Ogihara ◽  
...  
Keyword(s):  
Production System ◽  
Design Problem ◽  
Lead Time ◽  
Design Method ◽  
Inventory Level ◽  
Lead Times ◽  
Scale Production ◽  
Objective Functions ◽  
Inventory Cost ◽  
Production Problem

Product families are groups of related products that take advantage of part commonalities at various levels to streamline delivery of maximal product variety with minimal cost impact and as short as possible lead-times. This paper proposes a new integrated product design method for build-to-order production system based products, using the product family concept, which considers product performance, delivery lead-time and inventory cost. The development and discussion of this method uses a switchgear design problem as a concrete and practical design case. A build-to-order production system has been applied to switchgear manufacturing due to its small-scale production and a variety of customer requirements. However, if the risk of maintaining unsold inventory can be decreased, manufacturers can justify holding an amount of versatile inventory. In this paper, inventory production system is applied to the switchgear production problem to shorten the delivery lead-time. The switchgear design and production problem is formulated using three objective functions, which are subassembly procurement lead-time, inventory cost and area occupied by various switchgear configurations. Moreover, to assist inventory cost evaluations, a simulation procedure for the inventory system is proposed. The proposed method is used to obtain a Pareto optimal solution set of the three objective functions. Finally, an example switchgear design problem is solved to illustrate that optimal use of component commonalities across different modules can significantly reduce inventory costs, while also shortening product delivery lead-times.

Inventory Control and Replenishment of Multi-Product Multi-Echelon Based on Time Cost Under JMI Environment

2013 ◽  
Vol 5 (2) ◽  
pp. 19-30
Author(s):  
Zhi Chen ◽  
Chao Ren ◽  
Ren-long Zhang ◽  
Mi-Yuan Shan
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Service Level ◽  
Control Model ◽  
Management Tool ◽  
Time Cost ◽  
Inventory Cost ◽  
Inventory Costs ◽  
Total Inventory ◽  
Replenishment Strategy

Joint managed inventory is an advanced supply chain inventory management tool, which will effectively tackle the complicated problem between the inventory cost of supply chain and service level. The research on inventory model and its’ control under JMI environment is a hot issue at present. In this paper, the authors deeply discuss the question of the inventory time costs about the multi-product and multi-echelon control model and its’ replenishment strategy under JMI environment. With considering the foundation of JMI and time cost, the authors propose the multi-product multi-echelon inventory cost control model under time cost. Then formulate corresponding replenishment strategy. At last, through a numerical example, the authors discover that the multi-product multi-echelon joint inventory management based on time cost can effectively reduce the total inventory costs and improve the competitiveness of the entire supply chain.

scholarly journals Ordering Size Optimization of Raw Material to Minimize Inventory Costs using Wagner-Within Algorithm and Silver-Meal Methods

2021 ◽  
Vol 328 ◽  
pp. 05002
Author(s):  
Dira Ernawati ◽  
Sinta Dewi ◽  
Ni Ketut Sari ◽  
Kurniawan Budianto
Keyword(s):  
Control Method ◽  
Lot Sizing ◽  
Raw Materials ◽  
Cost Savings ◽  
Raw Material ◽  
Inventory Cost ◽  
Cost Overruns ◽  
Inventory Costs ◽  
Total Inventory ◽  
Abc Method

Inventory is one of the current assets that can be classified as company assets. But in reality, inventory often turns into an operational problem that can affect the company's overall performance. This problem occurs due to the incorrect determination of the amount of inventory. Both excess and shortage of inventory can lead to cost overruns. This study applies the Wagner Whitin Algorithm and the Silver-Meal method in the lot-sizing process and the ABC (Always Better Control) method in determining the classification of raw materials at PT. X. Using the ABC method, it is known that the ADC-12 Ingot item has a very significant effect to inventory. Inventory optimization using the Wagner Whitin Algorithm and the Silver-Meal method resulted in the optimal frequency of ordering ADC-12 Ingots is 9 times and the total inventory cost is 994,098,000 IDR as well as inventory cost savings of around 18,403,180 IDR or 1.8% of the cost of existing inventory.

scholarly journals PENGARUH PENGELOLAAN PERSEDIAAN BAHAN BAKU TERHADAP EFISIENSI BIAYA PERSEDIAAN DI PT HARMONI MAKMUR SEJAHTERA

2020 ◽  
Vol 5 (1) ◽  
pp. 45-54
Author(s):  
Hartono Hartono ◽  
Indit Andaresta
Keyword(s):  
Inventory Management ◽  
Cost Efficiency ◽  
Cost Management ◽  
Control Variable ◽  
Raw Material ◽  
Test Results ◽  
Stock Management ◽  
Inventory Cost ◽  
Significance Level ◽  
Inventory Costs

The purpose of this study is to determine how much the influence of raw material inventory management to the inventory cost efficiency at PT Harmoni Makmur Sejahtera. This study uses quantity research methods by giving questionnaires to 30 respondents, the calculation and data analysis conducted by using SPSS version 25. From the data proccessing, it was found a correlation value of 0.671, thus it can be concluded that there is a strong correlation between the variables of raw material stock management (X) on the efficiency of inventory costs (Y). Result of R square (R2) value of 0.451 or in the amount of 45.1%, therefore it can be said that the raw material inventory control variable has an effect of 45.1% on inventory cost management. The test results show that the t count is 4.793. The t table value, which is the standard, obtained the t table value at a significance level of 0.05, which is 2.480. The analysis results show the value of t count> t table (4.793> 2.480). This means that Ho is rejected and H1 is accepted, or there is a positive and significant influence between Raw Material Inventory Management on Inventory Efficiency.

scholarly journals Make or Buy Decision Making with the Consideration of Inventory Cost

2018 ◽  
Vol 7 (2.28) ◽  
pp. 29 ◽  
Author(s):  
Jirarat Teeravaraprug ◽  
Tarathorn Potcharathitikull
Keyword(s):  
Decision Making ◽  
Mathematical Models ◽  
Time Variation ◽  
Lead Time ◽  
High Demand ◽  
Inventory Cost ◽  
Numerical Example ◽  
Inventory Costs ◽  
Demand Variation

Make or buy decision making has recently received substantial theoretical and empirical attention. This paper integrates inventory cost in make or buy decision making. Many practitioners think that inventory cost is low when comparing with other types of costs. Therefore inventory cost seems to be neglect. This paper proposed two mathematical models of total costs in the cases of make and buy with the consideration of inventory costs. Based on the numerical example, it shows that the decision making may be changed with and without considering inventory costs. Further, considering variations of demand and purchase lead time, it is found that high demand variation tends to use buy option whereas high purchase lead time variation tends to use make option.  

Sign in / Sign up

Export Citation Format

Share Document