Safety Stock Research Articles

Joint optimisation of the maintenance and buffer stock policies considering back orders

Inventory control and maintenance systems are two main processes in production systems that play a vital role in the efficiency of production resources. This study aims to propose a joint optimisation procedure for maintenance and inventory policies in a single-machine production system considering back orders. The failure rate is random and the minimum level of accessibility required for preventive maintenance is considered. To close the problem at hand to the real-world condition, demand is considered as uncertain and shortage is inevitable. In addition, the unsatisfied demand is considered as back order. The problem is described and formulated via a mathematical model and all the possible scenarios corresponding to the different possible cases of the problem are described. Then a numerical iterative procedure is introduced to solve the problem in a reasonable time. The proposed procedure does not explore all solution space, but it behaves like a numerical optimisation procedure and provides a near optimal solution. The performance of the proposed method is evaluated using a numerical instance based on a real case study. In addition, some sensitivity analyses are performed to identify the most important effective parameters.

Blood Inventory Management During COVID-19 Pandemic Using a Simple Mathematical Tool: A Two-Year Study from a Tertiary Care Hospital in North India.

Multiple recurrent waves of the coronavirus disease 2019 (COVID-19) resulted in major fluctuations in blood supply and demand, which presented a major challenge for the blood centres to maintain adequate blood inventory. Hence, the primary aim of the present study was to determine whether safety stock as a simple mathematical tool can be used to maintain optimum blood inventory to meet all blood demands. The secondary aim of the study was to test whether daily blood stock index (DBSI), which was a novel index developed by the authors and derived from the calculated safety stock, can be used to minimize blood wastage due to the outdating of packed red blood cells (PRBC)/whole blood (WB) units. The present study was a descriptive, cross-sectional study conducted from 1st October 2019 to 31st December 2021 at a blood centre of a tertiary care hospital. For the purpose of data analysis, the time period of study was divided into 7 periods signifying different phases during the COVID-19 outbreak. Data of PRBC/WB (referred to as red cell) collection, red cell issue and the daily red cell stock were collected for these 7 time periods. Safety stock, percentage of out-dated whole blood/packed red blood cell units (OB) and DBSI were calculated based on the data extracted. Red cell collection as well as red cell utilization decreased during the 1st as well as the 2nd wave of the COVID-19 outbreak. The blood centre was able to meet the blood demand of the hospital at all times, as the daily average red cell stock remained above the calculated safety stock during all periods. OB (12.4%) and DBSI (2.3) were highest during the lockdown period of second wave of COVID-19 outbreak (period E). A strong direct relationship was seen between OB (dependent variable) and DBSI (predictor variable) [R = 0.79; p = 0.03]. Firstly, safety stock is a simple, user-friendly mathematic tool which can be used for efficient blood inventory management not only at times of a pandemic/disaster but also during routine times. Secondly, DBSI is a logical and empirical tool to reduce OB units and consequently reduce blood wastage.

Analysis of Merchandise Inventory Management at Petra Women's Cooperative (Case Study of Coop Mart Plaju)

Merchandise inventory plays an important role in the process of buying and selling at trading companies, so it is important for companies to manage and monitor their inventory. The problem discussed in this study was the lack of management of merchandise inventory which often resulted in the shortage of stock. This research was conducted at Petra Women's Cooperative (Coop Mart) located at Jl. Antara Annex II No. 292 Plaju Palembang. The data used in this study were primary and secondary data. The method applied in the research was qualitative and quantitative analysis method. The results of this analysis showed that the management of merchandise inventory of Petra Women's Cooperative (Coop Mart) was not regularly carried out as seen from the calculation of inventory turnover, safety stock and reorder point which fluctuated. This was caused by the lack of control over the goods entry and exit, which would affect inventory. Therefore, inventory management analysis was very essential to do to prevent shortages of goods.

Penggunan Safety Stock Order Untuk Mengatasi Delay Waktu Pada Proses Produksi Paracetamol Infus disalah Satu PT. Farmasi Di Sukabumi

In a company, of course there are lots of problems that often occur even though the system is running properly. Such as delays in goods, machine errors, transportation equipment, and others. With supply chain management, it is one of the most important factors that will be used to support and regulate operational activities in it. This research relates to the availability of raw material stocks which aims to avoid stockouts and meet demand levels. If done right, this system will increase the efficiency of supply chain management and reduce inventory costs. The main purpose of establishing the term safety stock related to inventory is to get a profit that is more in line with expectations in the company concerned. Profit will indeed be the most important factor that must be considered when building a company. The method applied is safety stock, which is an inventory prepared by a company to prevent inventory shortages when market demand is unstable, collecting data before delays occur, and calculating the required safety stock.

MANAJEMEN PERSEDIAAN BAHAN BAKU UBI CILEMBU PADA INDUSTRI RUMAH TANGGA ANEKA OLAHAN UBI CILEMBU KHAS MA UTIK SUMEDANG JAWA BARAT

Aneka Olahan Ubi Cilembu Khas Ma Utik is a home industry that processes Cilembu sweet potatoes into food products, namely sweet potato chips. This home industry has not used the optimal inventory management method for purchasing raw materials so the supply of raw materials for producing sweet potato chips is lacking. This problem needs to control inventory to get optimal inventory of raw materials. The purpose of this study was to analyze the inventory of raw materials according to the Home Industry and the inventory of raw materials according to the EOQ method and the comparison of the raw material inventory system of the Home Industry with the Economic Order Quantity Method. This study uses a qualitative descriptive research design with case study techniques. The results showed that this home industry made purchases of raw materials for cilembu sweet potato as much as 11,760 kg/year with a purchase frequency of 12 times, the total inventory cost incurred was Rp. 7,980,000. Safety stock is not carried out due to shortage of raw materials. The reorder point is made when 150 kg of raw material remains, while according to the Economic Order Quantity (EOQ) method, the optimal purchase of raw materials reaches 15,777.78 kg/year with a frequency of 12 times per a year. The total cost of inventory incurred is Rp. 5,634,839.9/year. Raw materials that need to be reserved are 116.7 kg/month. The reorder point is carried out when the remaining raw materials are 279.7 kg / month, therefore the Economic Order Quantity (EOQ) method can reduce the cost of inventory incurred and determine the optimal amount of raw material purchases.

Implementation of Raw Material Inventory Control System to Increase Sales of Hand Batik

This study aims to explain about how to control the supply of raw materials in the Batik Tulis Trading Business "Jetis Sidoarjo". The method used in the quantitative approach. The research approach in this thesis uses a quantitative research approach with a descriptive approach. In the object of this research, namely the implementation of a raw material inventory control system to improve the quality of batik production in Kampoeng Batik Tulis Jetis SMEs. The subjects in this research are the UMKM Kampoeng Batik Tulis Jetis, Lemahpuro Village, Sidoarjo District, Sidoarjo Regency, East Java. With descriptive research, the researcher only intends to describe (describe) or explain the symptoms that are currently happening. The results of this study can be concluded that using the calculation of safety stock and reordering is more effectively used in controlling raw material inventory when compared to current company policies. Companies can predict or avoid shortages or excess raw materials that can result in disruption of the production process by setting a safety stock calculation and also setting a re-order point, so the company can know or predict when to reorder and obtained with minimal inventory costs.

Implementasi Metode Period Order Qantity Dalam Pengendalian Persediaan Bahan Baku Crude Palm Oil

PKS Pagar Merbau is a plantation company engaged in palm oil processing. Due to the unpredictable level of demand, determining the timing and number of orders becomes difficult, resulting in increased inventory costs. By using the Period Order Quantity Method, it aims to be able to control Crude Palm Oil raw material inventory which will minimize inventory costs. The Period Order Quantity (POQ) method is a development of the Economic Order Quantity (EOQ) method where the number of orders can minimize the total cost of inventory. The results of applying this method, obtained the optimal number of orders of 1,208,798.12 kg for one order with a frequency of 101 times a year with a safety stock of 3,000,200.61 kg and a reorder point of 3,961,816.26 kg. The total inventory cost according to company policy is Rp. 3,159,298,770.65 while the total inventory cost according to the Period Order Quantity method is 2,879,961,532.42. Then the total inventory cost savings of Rp. 279,337,238.23 or 8.86%

Analisis Persediaan Bahan Baku Usaha Tempe Risky Di Desa Serumbung Kabupaten Bengkulu Utara

The purpose of this study was to analyze the supply of raw materials for the Tempe Risky business in Serumbung Village, North Bengkulu Regency. The analytical method used is Economical Order Quantity (EOQ), Total Cost (TC), Re Order Point (ROP), and Safety Stock (SS).
 The results showed that to meet the need for raw material supplies of 336 sacks during the research period, from January 2021 to December 2021 (2021), the number of purchases that were Economical / EOQ of soybean raw materials had to be carried out by the Tempe Risky Business in Serumbung Village. North Bengkulu Regency is a total of 6 sacks per order with a frequency of 56 orders in one period from January 2021 to December 2021. Reordering or Re-Order Point (ROP) can also be determined, namely reordering should be done when the inventory is in warehouse as much as 4 sacks, with a lead time of 2 days so as not to hamper the company's production process. Total Cost can also be determined, namely the total cost of raw material inventory Rp. 55,456,650, - so that it can save on inventory costs of Rp. 163.643.350,- Safety Stock (SS) of 2 sacks that must be in the warehouse, this is intended so that there is no shortage of soybean raw materials if there is a delay in the delivery of raw materials.

PERFORMANCE INDICATORS FOR IMPROVING STOCK MANAGEMENT:

Competition in markets is increasingly present and fierce on the world stage. Therefore, one of the main difficulties of any company that operates in the retail sector is to have control and balance in the stock without problems. The main objective of this case study is to map the most common inventory management tools in the literature, in addition to suggesting the appropriate management model for the most critical product and comparing it with the one currently used for inventory management in a microenterprise in the retail branch, collaborating to keep the stock constant, bringing greater stability in its management. This case study is based on the analysis of the company's history to identify opportunities for improvement and cost reduction. Through the application of the continuous revision model (System “Q”), the study proposes the adequacy of the assumptions of the products with the greatest impact, such as safety stock, economic purchase lot, replacement point and average quantity of orders. Based on a comparative analysis, it appears that for the studied scenario, the continuous revision system presents a more impactful reduction of the economic purchase lot by 75% for shirts, in addition to the reduction of the replacement point by 63% for shorts, in relation to the system, as well as greater security against stockouts and less variability in stock levels.

Drought shocks and price adjustments in local food markets in Chile: Do product quality and marketing channel matter?

AbstractLately, economies have been facing an increase in the frequency and magnitude of droughts, which come with potential consequences on food prices. This article aims to analyze how drought disturbances affect price differences in local food markets. Special attention is paid to differences in product quality and marketing channels. To study the mechanism behind price differences, our analysis is framed within the food market integration theory. Our methodology follows a dyadic regression approach, which allows us to exploit the panel data structure of our market price data. We use monthly Asterix potato and long shelf‐life tomato market prices from traditional markets and supermarkets in Chile. To measure drought intensity, we use remote sensing data to construct a drought index. Results show that drought shocks reduce market price differentials around harvesting and commercialization periods, which is supported by the existence of market integration. We also find that prices of high‐quality products, less perishable products, and those taken from traditional markets respond more intensively to droughts and take more time to be transmitted. A direct link between droughts and crop quality, as well as supermarkets’ larger capacity for buffer stock, may be behind these interpretations. Product differentiation and retail price rigidity arguments are also discussed.

Decision Criteria for Partial Nationalization of Pharmaceutical Supply Chain: A Scoping Review

(1) Background: Any disturbance in the pharmaceutical supply chain (PSC) can disrupt the supply of medicines and affect the efficiency of health systems. Due to shortages in the global pharma supply chain over the past few years and the complex nature of free trade and its limitations when confronted by a major global health and humanitarian crisis, many countries have taken steps to mitigate the risks of disruption, including, for example, recommending the adoption of a plus one diversification approach, increasing safety stock, and nationalizing the medical supply chains. (2) Objective: To scope findings in the academic literature related to decision criteria to guide national policy decisions for the “Partial Nationalization of Pharmaceutical Supply Chain” (PNPSC) from the viewpoints of the three main stakeholders: industry, payers (government and health insurance), and patients. (3) Methods: These consist of a scoping review of the peer-reviewed literature. (4) Results: A total of 115 studies were included. For local manufacturing decisions, five criteria and 15 sub-criteria were identified. Weighting, decision-making, risk assessment, and forecasting were the main data analysis tools applied; (5) Conclusions: The findings could serve as a baseline for constructing PNPSC frameworks after careful adaptation to the local context.

Analysis Of Perfume Seed Inventory Control At PT. Perintis Kiprah Sampono (Case Study Of Aromania Perfumery Karawang)

This study aims to analyze the inventory control of perfume seeds at PT. Pioneer Gait Sampono (case study of aromania perfumery Karawang). The aim is to find out how far the inventory control of aromania perfume seeds has been running effectively and efficiently. The method used in this research is descriptive with a qualitative approach, using a purposive sampling technique. Data collection techniques by conducting observations, interviews and documentation, to test the validity and reliability by using a triangulation process including source triangulation, technical triangulation, and time triangulation. The results of this study indicate that there are constraints on the supply of perfume seeds, where consumer demand is not fulfilled due to empty supplies resulting in lost sales or disruption of the sales process at the company, but with the always better control analysis method used, it can control every good inventory starting from the process. ordering, receiving goods, checking goods, storing goods, the process of releasing goods, the lead time of goods arriving to the safety stock.

Pengurangan Bullwhip Effect pada Rantai Pasok Air Minum Dalam Kemasan Menggunakan Metode Collaborative Planning, Forecasting, and Replenishment (CPFR): Studi Kasus

CV Tirta Alam Dodu is a privately owned company engaged in the beverage industry in the form of AMDK. The problem faced by the company is that there is a difference between demand and sales, or better known as the bullwhip effect problem. The purpose of this study is to reduce the bullwhip effect on the supply chain and optimize the amount of product inventory according to the amount of demand. The method used is the Collaborative Planning, Forecasting, and Replenishment (CPFR) method. Based on the results of the research conducted, it can be concluded that the analysis of demand forecasting calculations on AMDK products at CV Tirta Alam Dodu was carried out using historical data on product demand through five analytical methods, including Linear Trend, Moving Average, Exponential Smoothing, Decomposition, and Winter's Model. The best forecasting resulted in Winter's Model which showed the smallest error value compared to the other four models. The way to minimize so that it does not become a bullwhip effect is to use the CPFR method, where the bullwhip effect value is obtained on glass mineral water products and gallons of mineral water of 0,985 and 0,898, respectively. This result shows that there is no amplification of demand and has reached the company's target, which is to fall below number one. The way to optimize inventory so that there is no excess stock or shortage of stock in the product is to make the amount of inventory based on the amount of demand from the forecasting results plus the safety stock.

The Impact of Diversity, Inclusion and Equity Product Offering and Forecast Bias on Supply Chain Decisions

U.S. demographic change brings new product offerings, production planning, and distribution challenges. While many companies embrace diversity, inclusion, and ethnicity product offering, their practice often renders mixed results, potentially negatively impacting their profitability. We offer an interdisciplinary marketing and supply chain perspective in addressing demand distribution change and its impact on inventory and distribution decisions. In addition, we demonstrate the importance of developing culturally adapted inventory and customer analytics models for manufacturing and supply chain distribution. We examine demand forecast bias in the apparel industry through the product demand distribution analysis at the product size level. We propose supply chain solutions to alleviate the situation by product size re-positioning, distribution channel choice, multistage execution plan, lead time and safety stock, and planning and revenue management approach. We also recognize the potential of addressing the problem by better understanding the consumer behavior change process and allowing a more extended period of marketing campaigns. In the apparel industry, the planning and supply chain decisions assume product demand follows a normal distribution. However, our research found that the demand distribution is highly skewed with significant kurtosis. Therefore, during the planning stage, inventory policy must be adjusted to count for the bias in the demand distribution. Moreover, managers can orchestrate other supply chain and marketing solutions such as centralized operation, leading time and safety stock trade-offs, and more extended marketing campaigns to match supply and demand better. Our work offers some analytical and practical approaches to increase a better supply and demand match.

Enhancing Food Supply Chain in Green Logistics with Multi-Level Processing Strategy under Disruptions

Food supply chains (FSCs) have long been exposed to environmental variability and shock events caused by various economic, political, and infrastructural factors. The outbreak of the COVID-19 pandemic has further exposed and identified the vulnerability of FSCs, and promoted integrated optimization approaches for building resilience. However, existing works focusing on general supply chains (SCs) and FSCs have not been fully aware of the distinct characteristics of FSCs in green logistics, i.e., the expiration of fresh products. In reality, perishable food materials can be processed into products of different processing levels (i.e., multi-level processing) for longer shelf lives, which can serve as a timely and economic strategy to increase safety stocks for mitigating disruption risks. Motivated by this fact, we study the problem of enhancing FSC with a multi-level processing strategy. An integrated location, inventory, and distribution planning model for a multi-echelon FSC under COVID-19-related disruptions is formulated to maximize the total profit over a finite planning horizon. Specifically, a two-stage stochastic programming model is presented to hedge against disruption risks, where scenarios are generated to characterize geographical impact induced by source-region disruptions. For small-scale problems, the model can be solved with commercial solvers. To exactly and efficiently solve the large-scale instances, we design an integer L-shaped method. Numerical experiments are conducted on a case study and randomly generated instances to show the efficiency of our model and solution method. Based on the case study, managerial insights are drawn.

ANALISIS PENGENDALIAN PERSEDIAAN BERDASARKAN ABC CLASS-BASED DENGAN METODE ECONOMIC ORDER QUANTITY (EOQ) DAN REORDER POINT (ROP)

Inventory is an important item or asset owned by the company. Sufficient supplies must be maintained. Therefore, it is important to carry out good inventory control by carrying out effective, efficient and economical inventory planning. This research aims to 1) determine the inventory control in J&L clinic, 2) determine the grouping of beauty product in dividing into class A, B and C using Class-Based ABC method, 3) economical order quantity and time to reorder beauty product using the calculation of Economic Order Quantity (EOQ) and Reorder Point (ROP) methods in J&L clinic. The research method used is qualitative method with a descriptive type of research. Data collection technique through beauty product inventory documents, interviews and observations. Subjects or informants in this research is head of warehouse, warehouse staff, and admin staff in J&L clinic. The results showed that the control of the supply of beauty products carried out at the J&L clinic was quite optimal. Inventory planning that has been done is quite good. By looking at the number of requests and previous orders to meet the needs of the availability of goods in the warehouse. The result of grouping the results of class-based abc analysis based on demand and investment value for class A group has the highest number of requests amounting to 78,59% and 77.90% of the total investment value. Class B group has a total demand of 15.98% and 16.93% of the total investment value. class C group has a total demand of 5.44% and 5.17% of the total investment value. The results of the calculation of the EOQ method show that by using the EOQ method, the optimal number of orders for beauty products is more every time you make an order, but the frequency of ordering is less than the company's policy. The ROP method is determined to determine the time of reordering and added safety stock.

A Discrete-Event Simulation Study of Multi-Objective Sales and Operation Planning: A case of Ethiopian Automotive Industry

Sales and operation planning is an integrated tactical level panning system that balances demand and supply by determining optimum production amount, inventory level and capacity requirements to maximize customer service level and financial gain. It plays a major role in supply chain planning in enhancing responsiveness of all internal functions and linking them to customers and suppliers. This research aims at reviewing the subject area in the literature and develop a simulation model as an industrial engineering decision support system for an Ethiopian automotive industry. The industry's sales and operation planning process was surveyed to identify gaps and develop an enhanced simulation model that can be utilized to understand the system behavior and evaluate performance of manufacturing flexibility and inventory control policies. The simulation analysis result demonstrates that the customer service level and financial gains of the industry can be enhanced significantly through the proposed planning technique, flexibility, safety stock and emergency backup supply policies. The findings from the simulation analysis and their managerial implication are expected to improve the technical capability of Ethiopian automotive industries.

Data-Driven Environmental Sustainability of Supply Chain for Medical Equipment

Sustainable supply chain of medical equipment is challenging due to the inherent importance of having health-related components in-stock whilst balancing the economic and environmental impact of that. In general, to minimize the environmental impact of inventory management, physical inventory space and transportation amount can be lowered. However, in medical equipment, shortage of medical materials, and supplies could cause delays in providing adequate healthcare services. Therefore, effective inventory management is required to maintain a steady supply while minimizing the environmental and economic impact of supply chain. This study is aimed at assessing the environmental and economic impact of inventory for a medical equipment manufacturer. Inventory classification of the medical equipment manufacturer is performed using ABC analysis. After inventory classification using ABC, safety stock analysis is performed. Obtained inventory results are analysed both in terms of environmental sustainability using Life Cycle Assessment (LCA) approach and in terms of economic impact calculating cost of holding safety stock. An LCA model is created based on transportation of procurements. Impact assessment is performed to define most environmentally and economically impactful suppliers of the medical equipment manufacturer.

Sustainability Green Raw Material Inventory with Continuous Replenishment Method: A Case Study Housing Construction Company

The company is engaged in housing construction. Every year their production increase using green materials, from 2018 to 2021. This growth emerges problems such as overstock and dead stock. So the company has to determine the best Inventory Control Method to help the company get so much lost in stock and dead stock. In another way, the company can calculate the total cost for all the inventory activities. In the first calculation, we find the best solution forecast method for the next year in moving averages. The best forecast fit in best criteria, such as Mean Absolute Deviation, Mean Absolute Percentage Error, CFE, and Mean Square Error. Calculating the Inventory Control Method employing continuous replenishment, it is interpreted that the customer is still waiting for the product that has not been fulfilled. This Continuous Replenishment Method can calculate Safety Stock, Reorder Point, and Stock Out to minimize the total cost.

Production Scheduling Based on Smart Forecasting Model of Bottled Mineral Water Products

Optimal production planning is a problem that causes product stock buildup at PT Marina. Factors that affect production planning in the company are the conditions of Demand, Safety Stock, and Production Costs. The results of the demand forecasting method chosen are the Moving Average with N = 3 and the Mean Absolute Percentage Error (MAPE) = 0.05 is 68,084 boxes/period with a production cost of IDR 544,672.00/period. The Safety Stock of bottle products in the ninth forecasting period is 8076 Boxes. Based on the three factors above, an intelligent production planning model was developed using a fuzzy logic approach. The result of defuzzification of demand planning for bottle products for the ninth or three months using the Center of Area (COA) method was 59,917 Boxes. Based on the defuzzification of production planning, the total cost of aggregate production planning for the next three months using the chase strategy method is 617,235,300. 1500 ml = 17,105 boxes. Based on the aggregate planning model above, the company can schedule production and raw materials so that the warehouse’s product stock management is maintained optimally.