Inventory Cycle Time Research Articles

Inventory Optimization Model with Quadratic Demand Pattern and Non-instantaneous Deterioration Rate with Mixed Cash and Advance Payment Scheme

Objectives: To develop a mathematical model for cost minimization by examining a scenario involving a seasonal product retail market, evaluating the outcome, and providing solutions to unanswered queries of existing models are the highlights of this present work. Methods: 1. Using dynamic differential equations with initial and boundary conditions, we mathematically model a retail market scenario for perishable commodities and determine the retailer's total cost. 2. We consider a quadratic function of time to precisely describe the maintenance cost and demand function. Also, a combination of cash and advance payment schemes is implemented in our model. 3. Our model was numerically formulated using a dataset deduced from earlier research. We have included a sensitivity analysis and a numerical example with a graphical depiction of the total cost function that highlights the most and least influential factors. 4. Based on the Hessian matrix condition and the calculus derivative approach, we developed an algorithm to calculate the optimal cost. Findings: This model provides retailers with insights for effective stock management while optimizing the cost of retailing perishable commodities with non-linear demand patterns. Sensitivity analysis showed that the two factors that have the biggest impact on retailers' overall costs are non-linear demand and holding cost parameters. The smaller optimal inventory cycle time and the large value of time at which a shortage happens raise the overall cost. Additionally, because of higher demand, the time-dependent deterioration rate has the least impact on overall cost. Additionally, a three-dimensional graph of cost minimization is offered to illustrate the convexity of total cost. Novelty: Implementation of Quadratic time-dependent demand and non-linear holding costs under a mixed cash advance payment structure, along with time-dependent deterioration and partial backlog shortages. Keywords: Quadratic Demand pattern, Non­instantaneous decay rate, Cash and Advance Payment scheme, Partial Backlog Shortages

Circular economy of food: A secondary supply chain model on food waste management incorporating IoT based technology

Sustainable development goal (SDG) 12.3 urges reducing food waste to half at retail and consumer level and minimizing the losses along food supply chains by 2030. This study contributes to achieving these targets by incorporating a secondary supply chain with primary food chain, where food waste is controlled through IoT enabled preservation mechanism at retail level, and the yet created food waste along food chain is recycled through a secondary supply chain. Food waste at retail and consumer level is collected at a collection center by incentivizing the waste returns and recycled into secondary product at recycling plant. This study develops a mathematical model, integrating primary food chain with secondary supply chain, targeting waste control and recycling, material recovery, and economic benefits. Integrating IoT technology, product's lifetime-dependent deterioration rate is controlled by adjusting preservation conditions. This technology facilitates online inventory inspections and removal of expired items. Supply chain decisions are optimized for preservation cost and cycle time. Results of numerical experiments reveal the secondary supply chain consumes all the food waste, conserves 62% of material resources, reduces preservation costs by 65.8%, and enhances profits by 49%. IoT enabled preservation strategy extends the food product's lifespan and inventory cycle time, thus, controlling the causes of food waste creation. Finally, this study offers crucial insights for decision-making in food circular supply chains.

Is supply chain finance an antidote to SMEs in the economic crisis? - A qualitative inquiry

PurposeThis exploratory study aims to explore the operational and financial constraints faced by small and medium enterprises (SMEs) in India during the COVID-19 pandemic. The paper highlights the role of supply chain finance (SCF) in the uncertain business environment caused by the pandemic.Design/methodology/approachThe study adopts an inductive approach and conducts convergent interviews with 32 SME owners and bank officials who are associated with SME-related financial transactions. The analysis of the interview data has been done through a grounded theory approach.FindingsThe findings portray four key themes representing the operational and financial constraints faced by SMEs during the pandemic. Further, the study identifies four drivers of SCF adoption among SMEs, including capital constraints, high inventory turnover cycle time, high order fulfilment cycle time and long debtors’ collection period.Practical implicationsThe study provides various insights to the managers and owners of SMEs to deal with the economic crisis and eliminate the financial pressure created by the pandemic. The study enlightens the policymakers about the struggles of the SMEs during the economic turmoil created by the pandemic and guides them to introduce the relevant policies to resolve their problems.Originality/valueTo the best of the authors’ knowledge, this is the first study to identify the factors driving the SMEs to adopt SCF due to the economic chaos created by the pandemic. Also, the study theoretically contributes to the literature by developing a theoretical framework for SCF adoption based on grounded theory.

Optimization of Joint Economic Lot Size Model for Vendor‐Buyer with Exponential Quality Degradation and Transportation by Chimp Optimization Algorithm

Freight transportation plays a critical role in improving company performance in the modern manufacturing industry. To reduce costs, companies must take advantage of the use of large vehicles. It caused fewer deliveries, but inventory costs and degradation quality are high. One of the joint economic lot size (JELS) problems in supply chain is Integrated Single‐Vendor Single‐Buyer Inventory Problem (I‐SVSB‐IP). This study developed the I‐SVSB‐IP model that considers raw materials’ exponential quality degradation and transportation costs. The objective function of this research was to maximize the Joint Total Profit (JTP). Three decision variables used were inventory cycle time (T), raw material ordering frequency (m), and frequency of delivery of finished products to buyers (n). This study proposed a sophisticated Chimp Optimization Algorithm (ChOA) procedure to solve the I‐SVSB‐IP problem. A case study on the food industry in Indonesia was presented to optimize the I‐SVSB‐IP. The results showed that the ChOA procedure had produced an optimal solution compared to the state‐of‐the‐art algorithm. This study also demonstrated a sensitivity analysis of decision and transportation variables to cost, revenue, and JTP. The results show that increasing transport frequency of ordering raw materials (m) and finished products to buyers (n) enhances the total cost and reduces joint total profit. In addition, increasing the rate of quality degradation of raw materials reduces JTP.

Model Penentuan Jumlah Produksi yang Optimal pada Rantai Pasok dengan Produsen Tunggal dan Multi-Retailer

Determining the optimal size of procurement or production is the key word in determining optimal inventory. An integrated procurement and production size optimization model becomes a model that provides optimal results for all parties involved in the supply chain. This study proposes the development of a single producer and multi retailer supply chain model with the aim of minimizing the total inventory cost (TIC). The company distributes products to each retailer for further sale to consumers by the retailer. The annual demand from retailers is assumed to be different. Model development is carried out to obtain optimal production quantities for producers, optimal delivery quantities and determine the optimal number of retailers. The determination is based on the manufacturer's production cycle time is the same as the inventory cycle time at each retailer is the same. A simple algorithm is used to determine the optimal cycle time which can be followed by determining the optimal production size, optimal number of shipments and optimal number of retailers. At the end of this study, a numerical example of the use of a model that has been built based on case study data of a fertilizer industry is presented as a producer and its partners as retailers. The results of the numerical examples that have been carried out show that the optimal number of retailers is 3 retailers with an optimal production of 742 units, the determination of the optimal number of retailers is obtained from experiments with the lowest TIC value.

An Inventory Model for Perishable Items with Price-, Stock-, and Time-Dependent Demand Rate considering Shelf-Life and Nonlinear Holding Costs

Nowadays, consumers are more health conscious than before, and their demand of fresh items has intensely increased. In this context, an effective and efficient inventory management of the perishable items is needed in order to avoid the relevant losses due to their deterioration. Furthermore, the demand of products is influenced by several factors such as price, stock, and freshness state, among others. Hence, this research work develops an inventory model for perishable items, constrained by both physical and freshness condition degradations. The demand for perishable items is a multivariate function of price, current stock quantity, and freshness condition. Specific to price, six different price-dependent demand functions are used: linear, isoelastic, exponential, logit, logarithmic, and polynomial. By working with perishable items that eventually deteriorate, this inventory model also takes into consideration the expiration date, a salvage value, and the cost of deterioration. In addition, the holding cost is modelled as a quadratic function of time. The proposed inventory model jointly determines the optimal price, the replenishment cycle time, and the order quantity, which together result in maximum total profit per unit of time. The inventory model has a wide application since it can be implemented in several fields such as food goods (milk, vegetables, and meat), organisms, and ornamental flowers, among others. Some numerical examples are presented to illustrate the use of the inventory model. The results show that increasing the value of the shelf-life results in an increment in price, inventory cycle time, quantity ordered, and profits that are generated for all price demand functions. Finally, a sensitivity analysis is performed, and several managerial insights are provided.

Purchasing Inventory Models for Deteriorating Items with Quadratic Demand

This paper deals with purchasing inventory replenishment policy for deteriorating items, considering the time-dependent quadratic demand and time-dependent backlogging. Two models were formulated and solved. First, it is for deteriorating items with quadratically time-dependent demand for deteriorating items. Second, quadratically time-dependent demand for deteriorating items and shortages. A mathematical model is developed to the fourth-order equation for each model. The optimal production lot size, which minimizes the total cost, is derived. Sensitivity analysis is carried out to demonstrate the effects of changing parameter values on the optimal solution of the system. Numerical examples are taken to illustrate the procedure of finding the optimal inventory cost, cycle time, and optimal lot size. The numerical experiment in this model was coded in Microsoft Visual Basic 6.0.

Inventory Management and Organisational Efficiency

The study examined inventory management and organisational efficiency. The classical inventory management techniques were applied to an organisation’s inventory system. A door sales company in Ilorin, Nigeria that volunteered information on the basis of anonymity was used and relevant data were collected on six types of doors; panel, flush, sliding, folding and as well as manual and electronic garage doors. The company had no scientific inventory management strategy but the EOQ, inventory cycle time and reorder level were computed for the six doors using the average values of the data obtained for 2011-2017. The results show that the company can minimise its total inventory cost by consciously adopting an inventory management policy of ordering 55 panel doors, 41 flush doors, 41 sliding glass doors, 18 folding doors, 18 manual garage doors and 8 electronic garage doors respectively every cycle time of 17, 14, 17, 30, 35 and 34 days respectively or by placing the above orders each time the inventory level of panel doors, flush doors, sliding glass doors, folding doors, manual garage doors and electronic garage doors fall to 32, 24, 24, 5, 3 and 2 respectively and thus minimise the total cost of inventory.

Mathematical analytic techniques for determining the optimal ordering strategy for the retailer under the permitted trade-credit policy of two levels in a supply chain system

In this article, we explore a certain kind of two-level trade credit in order to reflect the real-life situations. With this objective in view, we consider the case when the supplier offers two-level trade credit for the retailer for settling the account. If the retailer pays off all accounts at the end of the first credit period, then he/she can utilize the sales revenue to earn interest until the inventory cycle time. On the other hand, if the retailer cannot pay off the unpaid balance at the end of the first credit period, then he/she can decide to pay off the unpaid balance either after the end of the first credit period or after the second credit period. Here, in this situation, the retailer reduces the financed loan from constant sales and revenue received gradually and he/she still can utilize the sales revenue to earn interest when he/she pays off all accounts. Maximizing the profit is used as the objective to develop the inventory model. Based upon the obtained properties of the optimal solution, two theorems are developed to determine the optimal replenishment policy. Finally, computational developments are presented in order to illustrate numerically the main theoretical results which are proven in this article by using some mathematical solution procedures.

The impact of the concepts of lean manufacturing on the strategies of the supply chain

In a highly competitive environment, cost reduction and optimization of the supply chain are more than ever a strategic issue for companies. In this sense, lean manufacturing is a lever that allows the company to continuously reduce the time required for the transformation of raw materials into finished products, eliminating waste and with the aim to meet the growing and diverse needs of these customers.In this paper, it based on the latest studies in this field in order to highlight the relationship between supply chain and lean manufacturing at reducing costs, eliminating waste and non-value added. Then it highlights the impact of lean manufacturing on the reactivity of the supply chain through inventory reduction, cycle time and flow acceleration. Finally, it presents the role and expectations of the supplier in the context of the merger Lean Manufacturing and Supply Chain.This research has enabled to understand the impact of lean manufacturing concepts on supply chain strategies.

An EOQ Model for Phase Inventory with Induced Demand and Periodic Cycle Time

This paper deals with a stock flow of an inventory problem over induced demand. The inventory is consumed through “core customer” or chain marketing system in an induced environment (inductance) to exhaust all the items of the stock inventory in an indefinite time. The demand rate is depicted due to induced factor which is generated from the same inventory presented nearby. The inventory cycle time is split into several periodic times due to oscillatory feature of the inventory which is called phase inventory. Considering uniform demand, this cycle time splits into two basic parts, namely, “first shift” (phase) and “second shift” (phase). Since the process dampens over time, so the whole inventory will exhaust after few periods. A cost function consisted of inventory cost, setup cost, and loss for induced items is minimized to obtain optimal order quantity and replenishment time. The multivariate lagrange interpolation (MLI) over the average values of the postsensitivity analysis is developed here. Finally, graphical illustrations are made to justify the model.

Optimal Payment time for a Retailer with exponential demand under permitted credit period by the Wholesaler

In paper Jamal et al.[32] developed a retailer’s model for optimal cycle time and payment times for a retailer’ in a deteriorating item inventory situation where a wholesaler allows a specified credit period to the retailer for payment without any charge. This paper is the extension of Jamal et al. [32] paper. In competitive business environment the most important objectives for companies is to reduce replenishment cost. This paper considers the inventory policy for non deteriorating items with exponential demand rate. The demand rate is assumed to be increasing function of time .In this study a retailer’s model for optimal cycle time and optimal payment times for a retailer have been developed, where a supplier allows a particular credit period to the buyer for payment without any extra charge. The supplier and buyer system is modeled as a optimal profit problem to determine the optimal payment time under different parameters under the same condition. The numerical technique method is used to solve the problem for finding optimal payment time and optimal inventory cycle time. The results are discussed with the help of sensitivity analysis of the optimal solution with respect to the different parameters of the system is given.

ENVIRONMENTALLY SUSTAINABLE INVENTORY MODEL UNDER PERMISSIBLE DELAY IN PAYMENTS

Within the economic order quantity (EOQ) framework, the main purpose of this paper is to investigate the supplier optimal replenishment policy of permissible delay in payments. All previously published articles dealing with optimal order quantity with permissible delay in payments assumed that the supplier only offers the retailer fully permissible delay in payments if the retailer ordered a sufficient quantity. Otherwise, permissible delay in payments would not be permitted. However, in this paper, we want to extend this extreme case by developing the mathematical model for determining the cycle time. Under this condition, we model the retailers inventory system as a cost minimization problem to determine the retailers optimal inventory cycle time and optimal order quantity. Finally, numerical examples are given to illustrate all these cases and to draw managerial insights.

The multi server M/M/(s,S) queueing inventory system

We consider a multiserver Markovian queuing model where each server provides service only to one customer. Arrival of customers is according to a Poisson process and whenever a customer leaves the system after getting service, that server is also removed from the system. Here the servers are considered as an inventory that will be replenished according to the standard (s,S) policy. Behavior of this system is studied using a two dimensional QBD process. The condition for checking ergodicity, the steady state solutions and average inventory cycle time are obtained using matrix analytic methods. Also we have studied an optimization problem that minimizes the total cost induced by the waiting cost of arrivals, holding cost of the inventory of servers and ordering cost. Some numerical illustrations are provided.

Inventory Rationing Based on Different Shortage Cost: A Stable Inventory Demand Case

Abstract This paper discusses an inventory rationing system with a threshold in a relatively stable inventory demand environment. There are two different demand classes in this inventory system, prior demand and secondary demand, distinguished by different shortage cost. The inventory system functions as follow. When the inventory level is above the threshold, demands come from both classes are filled. Once the inventory level falls below the threshold, all demands come from secondary demand class are backordered, only prior demand would be served. Heuristic approach was used to solve the model in this paper, and the optimal order quantity, single inventory cycle time and inventory threshold were given. Compare between inventory system with and without inventory threshold shows the cost advantage of the first system. Sensitivity analysis was performed to give a better understanding of two crucial parameter, inventory threshold and cost saving rate.

Retailer’s optimal replenishment and payment policies in the EPQ model under cash discount and two-level trade credit policy

The main purpose of this paper is to investigate the retailer’s optimal cycle time and optimal payment time under the supplier’s cash discount and trade credit policy within the economic production quantity (EPQ) framework. In this paper, we assume that the retailer will provide a full trade credit to his/her good credit customers and request his/her bad credit customers pay for the items as soon as receiving them. Under this assumption, we model the retailer’s inventory system as a cost minimization problem to determine the retailer’s optimal inventory cycle time and optimal payment time under the replenishment rate is finite. Then, an algorithm is established to obtain the optimal strategy. Finally, numerical examples are given to illustrate the theoretical results and obtain some managerial phenomena.

Extending supply chain synchronisation to upstream tiers: a collaborative approach illustrated with an automotive case study

This paper describes a set of guiding principles designed to help supply chain practitioners define inventory and ordering policies collaboratively. An automotive case study illustrates the approach, which requires supplying and buying firms to model their supply chains together. The target is to optimise the chain by maximising the extent to which supply chain processes are synchronised to end customers' demand. The theoretical optimum synchronisation for any chain would be a 'sequenced one-piece flow'. This is often achieved between the Original Equipment Manufacturer (OEM) and Tier 1 through arrangements with co-located 'sequenced suppliers'. However, factors such as decreased proximity and uncertain demand means that this high level of synchronisation rarely extends beyond Tier 1. Therefore synchronisation applies to a relatively low percentage of value-added in the chain. The approach put forward in this paper gives a way to extend the principal of synchronisation upstream, defining the zones of synchronisation (delineated by the 'sequence boundary' and 'synchronisation boundary') that are both possible and beneficial. The findings from the case study show that adopting the guidelines would offer the opportunity to increase synchronisation significantly, thereby reducing inventory and supply chain cycle time.

A two‐warehouse inventory model for items with three‐parameter Weibull distribution deterioration, shortages and linear trend in demand

AbstractDepending on the type of goods and storage facilities available, perishable goods decay in different manners in terms of the initial point and rate of deterioration. The three‐parameter Weibull distribution is an excellent generalization of exponential decay, with the flexibility of modeling various types of deteriorations. Since inventory management of perishable goods involves expensive storage facilities, the retailer with small storage may have to rent a warehouse. In this paper, we discuss a two‐warehouse inventory model where deteriorations in the two warehouses follow independent three‐parameter Weibull distributions. Transfer of units is from the rented warehouse to the own warehouse, and incurs a positive cost per unit. Demand is a non‐decreasing linear function of time, shortages are backlogged and replenishment is instantaneous. A solution procedure for obtaining optimal values of initial inventory level and cycle time is presented. Sensitivity analysis is carried out. The effect of using other related deterioration distributions is illustrated.

EPQ Models under Permissible Payment Delay: An Algebraic Approach

The main purpose of this paper is to relax the Ouyang et al.’s model (2004) using the algebraic method to determine the optimal inventory replenishment policy for the retailer under finite replenishment rate and permissible delay in payments. Ouyang et al. (2004) assumed that the retailer would not consider paying payment until receiving all items. The purpose of this paper is to relax this assumption and establish the retailer’s inventory system as a cost minimization problem to determine the retailer’s optimal inventory cycle time. Then, an algebraic approach is provided and an easy-to-use theorem is derived to efficiently determine the optimal cycle time. Finally, numerical examples are given to illustrate the results and managerial insights are drawn.

A genetic-based algorithm for the operational sequence of a high speed chip placement machine

Surface mount component placement machines are widely used in electronic manufacturing industry for automated placement of components on printed circuit boards. In this paper, we propose a new approach to the component placement problem using high speed turret style chip shooter machine and investigate the case of one single machine and one board type case with the objective of minimizing the assembly (cycle) time per board. The proposed method first groups the component types that can be processed at the same machine speed. Then the minimum spanning tree technique is employed to perform feeder duplications, reducing the distance effect between components of each type. Finally, a genetic-based algorithm with 2-opt local search using feeder arrangement list as solution representation is applied to determine the component placement sequence. Our experimental results indicate that the algorithm produces satisfactory solutions when a lower bound on cycle time per board is used as the evaluation criterion. It is also shown that the overuse of feeder duplication will produce a negative effect on the cycle time. Finally, the algorithm can help management to make a production plan that takes both component inventory cost and cycle time into consideration.