scholarly journals Inventory simulation-optimization model for small business

2020 ◽  
Vol 1 (2) ◽  
pp. 55-60
Author(s):  
Yudhia Mulya
Keyword(s):  
Inventory Management ◽  
Lead Time ◽  
Simulation Optimization ◽  
Minimum Cost ◽  
Uncertain Demand ◽  
Optimal Order ◽  
Inventory Cost ◽  
Business Decision ◽  
Total Inventory ◽  
Cost Simulation

Simulation-optimization inventory models are widely used in inventory management studies, including for perishable good. A good inventory management is required to save inventory cost. We use simulation approach to take into consideration of uncertain demand and lead time to obtain a better result of optimal order quantity that minimizes inventory cost. Simulation result shows that simulation-optimization models generates lower total inventory cost. The simulation provides information of objectives in inventory management: (1) how much to order and (2) when to order with minimum cost which gives valuable information in business decision making.

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 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 An Optimal Order Quantity Of Spare Parts To Minimize Total Inventory Cost Using Periodic Review Approach (R,s,s) Method In PT. XYZ Bandung

2017 ◽  
Vol 1 (02) ◽  
Author(s):  
Feviana Betsi Purba ◽  
Luciana Andrawina ◽  
Murni Dwi Astuti
Keyword(s):  
Spare Part ◽  
Spare Parts ◽  
Optimal Order ◽  
Periodic Review ◽  
Order Quantity ◽  
Inventory Cost ◽  
Inventory Policy ◽  
Total Saving ◽  
Manufacturing Company ◽  
Total Inventory

The availability of spare parts is very crucial thing for manufacturing company in order to support the continuity of production activities. PT XYZ is a manufacturing company which produces thread into fabric. In this case, inventory control of spare part is not properly managed. Inventory position of spare parts in warehouse is always more than inventory policy of the company itself or called overstock which causes total inventory cost is always high. Company only consider on the order fulfillment of spare parts to prevent downtime on the machine that increase performance of production. Hence, order quantity of spare parts is always excessive or not optimal. In this research, global inventory policy conducted in order to minimize total inventory cost is periodic review approach (R, s, S) method. This inventory policy will be calculated using power approximation and obtained total saving cost of holding cost by 31 % while total saving cost of order cost decreased by 7 %. Overall, total inventory cost minimized by 7 % or equal to Rp138.902.742.

scholarly journals SUPPLY LEAD TIME UNCERTAINTY IN A SUSTAINABLE ORDER QUANTITY INVENTORY MODEL

2013 ◽  
Vol 4 (4) ◽  
pp. 15-27 ◽  
Author(s):  
Salvatore Digiesi ◽  
Giorgio Mossa ◽  
Giovanni Mummolo
Keyword(s):  
Inventory Management ◽  
Lead Time ◽  
Expected Value ◽  
Air Pollutant ◽  
Pollutant Emission ◽  
Optimal Order ◽  
Inventory Level ◽  
Order Quantity ◽  
Industrial Case Study ◽  
Safety Stock

Abstract Transport plays a key role in inventory management since it affects logistic costs as well as environmental performance of the supply chain. Expected value and variability of supply lead time depend on the transportation means adopted, and influence the optimal values of order quantity, reorder level, and safety stock to be adopted. Fast transportation means allow reducing expected value of the lead time; they are characterized by the highest costs of externalities (i.e. air pollutant emission, noise, congestion, accidents). On the contrary, slow transportation means require high inventory level due to large order quantity; in this case costs of externalities tend to decrease. The Sustainable Order Quantity (SOQ) [1] allows identifying optimal order quantity, reorder level, safety stock as well as transportation means which minimize the sum of the logistic and environmental costs in case of stochastic variability of product demand. In this paper, the authors propose a new SOQ analytical model considering stochastic variability of supply lead time (LT). A solution procedure is suggested for solving the proposed model. The approach is applied to a real industrial case study in order to evaluate the benefits of applying it if compared with the traditional one.

scholarly journals Manajemen Persediaan Tepung Terigu dengan Metode Economic Order Quantity (EOQ) pada Perusahaan Roti Nikki Echo Payakumbuh

2018 ◽  
Vol 1 (1) ◽  
pp. 21-27
Author(s):  
Desi Rahma Yani ◽  
Mega Amelia Putri ◽  
John Nefri
Keyword(s):  
Inventory Management ◽  
Production Cost ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Company Policy ◽  
Total Inventory ◽  
A Company

Inventory management has an important role in a company because inventory management can decrease production cost. Economic order quantity using to minimize the production cost. Inventory management of flour in bread company Nikki Echo not been seen clearly prove by  so many booking amount. It can giving addition of cost. The purpose of this research is (1) Analyzing optimal flour stock by using EOQ method in bread company Nikki Echo, (2) Analyzing reorder point raw material inventory by using EOQ method in bread company Nikki Echo, (3) Analyzing total raw material inventory cost by using EOQ method in bread company Nikki Echo. This research be held from February 20 until April 19 2018 in bread company Nikki Echo, Tanjung Pauh, Payakumbuh city, West Sumatera province. Flour stock by using EOQ method as much 17.394 kg it means the amount greater than company policy. That amount increase 79,6% from the amount set by company. Frequency of booking less than company policy that is 7 times booking. Amount of reorder by using EOQ method is 10.251 kg with the inventory lead time for 3 days. Total inventory cost by using EOQ method as many Rp 11.445.513. This value small than total inventory cost issued by company policy. Decreasing cost amount 98% from company policy. That cause by ordering amount reduced 33 times or same with 82,5% from the amount before

scholarly journals Decreasing Total Inventory Cost by Controlling Inventory in Motorcycle Dealer

2020 ◽  
Vol 22 (2) ◽  
pp. 41-49
Author(s):  
David ◽  
Engmir ◽  
Irwan Budiman ◽  
Jusra Tampubolon
Keyword(s):  
Inventory Management ◽  
Demand Forecasting ◽  
Spare Parts ◽  
Order Quantity ◽  
Inventory Cost ◽  
Safety Stock ◽  
Safety Stocks ◽  
Forecasting Method ◽  
Total Inventory ◽  
Abc Analysis

This research was conducted at one of the motorcycle dealers in Indonesia. Besides selling motorcycles, this dealer also provides services to repair motorcycles and sells genuine motorcycle parts. Inventory management which the company carried out is still not good enough because there are still demand for spare parts from consumers that cannot be fulfilled by the company. The purpose of this study is to draw up a plan to control spare parts by paying attention to the spare parts that need to be considered, estimating the exact number of spare parts demand, knowing the smallest total inventory cost, knowing the amount of safety stock needed, and knowing when to reorder. In preparing the spare parts control, the methods used are ABC analysis, demand forecasting method, and EOQ method. The results of this study are plans to control the inventory of Tire, Rr. such as the forecasting sales of Tire, Rr. as many as 17338, economic order quantity of Tire Rr are 2158 units, the number of safety stocks of Tire, Rr. needed in 2020 are 1738 units, and the reorder point in 2020 is 8 times with the total inventory cost for Tire, Rr. in 2020 is Rp. 30,009,005.

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 Multi-Criteria Inventory Optimisation of University of Ibadan, Ibadan, Nigeria’s Bakery Using Goal Programming Approach and Flour as the Major Raw-Material

2021 ◽  
Vol 9 (12) ◽  
pp. 650-660
Author(s):  
*Bolarinwa, Mojisola A. ◽  
Fajebe, Fisayo E.
Keyword(s):  
Goal Programming ◽  
Lead Time ◽  
Raw Materials ◽  
Service Level ◽  
Storage Space ◽  
Time Duration ◽  
Inventory Cost ◽  
Turnover Ratio ◽  
Total Inventory ◽  
University Of Ibadan

Asides inventory cost, which is being used as the only inventory performance measure at the University of Ibadan bakery, a number of other criteria, such as inventory cost, service level, inventory turnover and delivery lead time which influence the performance of an inventory system have surfaced over the years. Hence, there is the need to examine all these criteria-objectives altogether. Therefore, this research was centred towards optimising the inventory system of University of Ibadan bakery, putting multiple criteria into consideration. Data on 17 raw materials: their costs, suppliers, usage rate, lead time, storage space and available capital were collected by means of interviews, past records and observations. The weighted goal program algorithm was adopted to find the best compromise between fulfilling the four objectives by minimising the sum of the deviation from the target values of the goals. Subsequently, Lingo 17.0 and Tora 1.0 optimisation software packages were used to solve and compare the model generated, while putting into consideration storage space constraint and budgeted capital. The developed model from the goal programming algorithm exhibited four goals (combined into one objective function). Same solutions were obtained from Lingo 17.0 and Tora 1.0. While Lingo 17.0 gave a  uniform service level of 100% , a  turnover ratio greater than 1(>1) for all the materials at a negligible increase (of  < 0.0001%) in total inventory cost of the raw materials and available lead time duration of zero days (< 24 hours) for each material, Tora 1.0  gave a  uniform service level of 100% , a  turnover ratio greater than 1 (> 1) for all the materials at a negligible increase (of  < 0.0001%) in total inventory cost of the raw materials and available lead time duration of zero days (< 24 hours) for each material. Implementation of the developed model will eliminate unnecessary waiting time between production, thereby ensuring effective and efficient utilisation of raw materials in production which will lead to reduced cost of holding inventory, elimination of unnecessary overall cost and wastages, and also improvement of the productivity and profit on the long run.

scholarly journals Analisis Pengendalian Ketersediaan Bahan Baku Di PT. Akasha Wira Internasional, Tbk Menggunakan Metode EOQ

2020 ◽  
Vol 2 (1) ◽  
pp. 22
Author(s):  
Sandi Wardani ◽  
Sri Rahayuningsih ◽  
Ana Komari
Keyword(s):  
Raw Materials ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Optimal Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Safety Stock ◽  
Reorder Point ◽  
Total Inventory

This study aims to analyze the availability of raw materials at PT. Akasha Wira Internasional Tbk, analyzes the total cost of raw material inventories, analyzes to reorder point raw materials, analyzes the amount of safety stock of raw materials, analyzes raw material inventory control. The analytical method used is the Economic Order Quantity method, which is to find out the optimal order or purchase quantity with the aim of minimizing inventory costs consisting of ordering costs and storage costs. The results showed that the purchase of optimal ades 1500 ML label raw materials according to the Economic Order Quantity method during the 2017 period for each message was greater than what the company did. The optimal purchase of raw materials that must be done by the company in 2017 is 397 m with the frequency of ordering that must be done as much as 2 times. The safety stock quantity that must be available in the warehouse is 480.15 m and the Re Order Point according to the Economic Order Quantity is at the time of the inventory in the warehouse is 512.91 m. The total inventory cost for the production process incurred according to the Economic Order Quantity method is smaller than the total inventory cost incurred by the company. Keywords: Inventory, Raw Materials, Economic Order Quantity  Penelitian ini bertujuan untuk menganalisis ketersediaan bahan baku di PT. Akasha Wira Internasional Tbk, menganalisis total biaya persediaan bahan baku, menganalisis untuk melakukan pemesanan kembali (reorder point) bahan baku, menganalisis jumlah persediaan pengamanan barang  (safety stock) bahan baku, menganalisis pengendalian persediaan bahan baku. Penggunaan pendekatan yaitu metode Economic Order Quantity sebagai cara menyimpan bahan baku untuk ketersediaan biaya pesan dan biaya simpan bahan baku. Data yang diperoleh adalah data primer dan data sekunder. Pada bahan baku  ades 1500 ML tahun 2017 memiliki tingkat pemesanan yang lebih tinggi. Pembelian bahan baku optimal yang harus dilakukan perusahaan pada tahun 2017 adalah sebesar 397 m dengan frekuensi pemesanan yang harus dilakukan adalah sebanyak 2 kali. Kuantitas persediaan pengaman yang harus tersedia digudang adalah sebesar 480,15 m dan titik pemesanan kembali menurut Economic Order Quantity yaitu saat persediaan digudang tinggal 512,91 m. Maka dalam proses produksi menurut EOQ lebih kecil diabnding dengan total pembiayaan dari perusahaan.  Kata Kunci :  Persediaan , Bahan Baku, Economic Order Quantity

scholarly journals A Procedure for Scheduling Inventory of an Industry by Merging Forecasting and Linear Programming

2020 ◽  
Vol 68 (1) ◽  
pp. 65-70
Author(s):  
AKM Selim Reza ◽  
Sayma Suraiya ◽  
M Babul Hasan
Keyword(s):  
Linear Programming ◽  
Raw Materials ◽  
Minimum Cost ◽  
Inventory Cost ◽  
Model Combining ◽  
Forecasting Method ◽  
Holding Cost ◽  
Optimum Order ◽  
Total Inventory ◽  
Inventory Holding

In this paper, we develop a mathematical model combining forecasting and linear programming for a business organization of Bangladesh to calculate optimum order quantity and inventory cost. We test the model using raw data of the demand for the raw materials and spare inventory for the industry and find out minimum total inventory cost along with ordering cost and inventory holding cost. The developed model make a match between the forecasted demand of raw materials and spare inventory and the minimum total cost of inventory. Finally comparing minimum cost, we observe that our estimated appropriate forecasting method gives optimal inventory cost. Dhaka Univ. J. Sci. 68(1): 65-70, 2020 (January)

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