Inventory Control Methods Research Articles

An interactive method for inventory control with fuzzy lead-time and dynamic demand

Normally, the real-world inventory control problems are imprecisely defined and human interventions are often required to solve these decision-making problems. In this paper, a realistic inventory model with imprecise demand, lead-time and inventory costs have been formulated and an inventory policy is proposed to minimize the cost using man–machine interaction. Here, demand increases with time at a decreasing rate. The imprecise parameters of lead-time, inventory costs and demand are expressed through linear/non-linear membership functions. These are represented by different types of membership functions, linear or quadratic, depending upon the prevailing supply condition and marketing environment. The imprecise parameters are first transformed into corresponding interval numbers and then following the interval mathematics, the objective function for average cost is changed into respective multi-objective functions. These functions are minimized and solved for a Pareto-optimum solution by interactive fuzzy decision-making procedure. This process leads to man–machine interaction for optimum and appropriate decision acceptable to the decision maker’s firm. The model is illustrated numerically and the results are presented in tabular forms.

A flow-network approach for equilibrium of material requirements planning

Material requirements planning (MRP) has been a very popular and widely used multi-level inventory control method since 1970s. Recent developments in computer and information technology accelerate and facilitate the calculations necessary for MRP, but MRP is simply a system to open and trace the production/purchasing orders under pre-determined lead-time and lot size constraints. It does not directly include any optimization feature. In this article, an approach, which consists of the Flow Network with Side Constraints, is discussed in order to optimize the material flows in MRP problems. Additionally, an example case is given in order to show the applicability of the flow network formulation to APS. The model of the example case is solved and the computational results are given.

Joint optimization of preventive maintenance and inventory control in a production line using simulation

This paper proposes an integrated method for preventive maintenance and inventory control of a production line, composed of n machines (n ≥ 1) without intermediate buffers. The machines are subject to failures and an age-dependent preventive maintenance policy is used. Approximate analytical results are proposed for the one machine case. Simulation software is used to model and simulate the behaviour of the production line of n machines under various maintenance and inventory control strategies. A methodology combining the simulation and genetic algorithms is proposed jointly to optimize maintenance and inventory control policies. Results are compared with the analytical solutions.

EFFECT OF ACTIVITY SCHEDULINGS AND INVENTORY CONTROL: AN EXPERIMENTAL INVESTIGATION FOR PC ASSEMBLY

ABSTRACT This paper investigates three scheduling algorithms and three inventory control policies to evaluate their effect on the system performance measures using computer simulation. The model chosen is a flow-shop type, computer assembly plant. Analysis is conducted on two scheduling measures (summation of process time and tardiness) and two inventory control measures (ordering cost and holding cost). The scheduling algorithms used are Shortest Processing Time, Genetic Algorithm and Simulated Annealing. The aim of the applied algorithms was to minimize the sum of flow times. Since it is known that SPT minimizes sum of flow times, it provides a benchmark for comparing the efficiency of genetic algorithm and simulated annealing search methods. EOQ, MRP and JIT are used as inventory control methods. An experimental design for the comparison is presented to evaluate which combination of control methods produces the best results under the designed scenario.

The Economic and Environmental Implications of Centralized Stock Keeping

SummaryRecent changes to the management of inventory and warehousing methods have created significant changes in business processes. These changes have produced economic savings to firms from reduced handling of supplies. The system‐wide impacts of this shift in methods on overall cost and the environment are still unclear, however. Reductions in inventories can provide significant environmental savings. In this article, we analyze the changes in inventory control methods and assess the environmental and cost tradeoffs between increased trucking and more efficient centralized warehouses. We consider the case of consolidating the spare‐parts inventory at U.S. Department of Defense warehouses and discuss similarities to other existing businesses. The case suggests large economic and environmental benefits due to reductions in warehousing expenses, despite higher transportation costs.

A reverse logistics valuation method for inventory control

We propose a method for valuing new, recoverable, and recovered assemblies (products, components, parts, etc.) in production systems with reverse logistics. Values of assemblies influence their opportunity holding cost rates and are hence essential for comparing inventory strategies in average cost models. We argue that the proposed method is 'correct' from a discounted cash flow (DCF) point of view. We refer to some previous results on valuing assemblies in systems without disassembly of returned products that seem to confirm this. Furthermore, we test the method for a specific example with disassembly of returned products. The simulation results indicate that the method indeed leads to (nearly) DCF optimal inventory strategies.

Stocking strategy for service parts – a case study

Service part inventories cannot be managed by standard inventory control methods, as conditions for applying the underlying models are not satisfied. Nevertheless, the basic questions of inventory control have to be answered: Which parts should be stocked? Where should they be stocked? How many of them should be stocked? Presents a case study in which a pragmatic but structured approach is followed – a framework is developed and built into a spreadsheet. The resulting tool has been tested in a real‐life situation, indicating that considerable amounts of money can be saved.

Items to Consider for Just-in-Time Use in Marketing Channels: Toward a Development of a Decision Tool

This study focuses on an empirical analysis of variables associated with the evaluation of inventory management techniques. There are 23 items that channel managers should examine before deciding to use just-in-time as the primary inventory control method in a particular channel network. These items can be grouped under the five categories of delivery effectiveness, information system needs, spatial concerns, financial resources, and channel cohesiveness to form a crucial decision tool for channel managers.

Selecting the Best Periodic Inventory Control and Demand Forecasting Methods for Low Demand Items

Selecting the Best Periodic Inventory Control and Demand Forecasting Methods for Low Demand Items

A Simulation Method for Inventory Control with Scheduling

A Simulation Method for Inventory Control with Scheduling

Stock Management and Performance Measurement

The introduction of the Just In Time (JIT) techniques for parts procurement implies a thought on the indicators capacity in place to translate the process of the management system. The identification of families of parts based on the cluster analysis of the planning statistics parameters has allowed the development of a new method for inventory management and control in IBM. The system performance and the general coherence of procurement depend on the homogeneity of the identified part families.

Evaluating the impact of frequent engineering changes on MRP system performance

The major objective of engineering change is to redesign product/component parts to perform better or to be produced more efficiently. However, frequent engineering changes contribute to scheduling instability. When a material requirements planning (MRP) system is used as the production planning and inventory control method, scheduling instability becomes the most difficult problem for production planners to deal with. The purpose of this paper is to evaluate the trade-off between frequent engineering changes and resultant cost increments in writing off obsolete items. A simulation experiment is conducted to examine the effect of different frequencies of engineering changes on the performance of a multi-level MRP system under various operating environments. An analysis is also performed to evaluate the sensitivity of base experimental results to changes in important parameters which are held constant in the simulation experiment. Results show that frequent engineering changes indeed deteriorate MRP system...

Inventory control and quality system requirements—a case study

In this study we have examined the requirements of two commonly used quality standards and how the generally approved inventory control methods in two large Finnish paper mills respond to these requirements. We have tried to answer questions such as; do the quality system activities complicate or do they have conflicting goals with the logistics system, or are there supporting activities or goals? The current state of inventory and quality systems in these companies has also been examined. We have found out that, although these two systems have concentrated on different characteristics from inventory activities and they respond at the different level, they support each other. Even so that an appropriate quality system forms a basis to efficient inventory control.

Flexible assignment approach to itinerary seat allocation

This paper proposes a new approach to the optimal allocation of airline seats among itineraries in a network under stochastic demand. Current approaches to network seat inventory control are based on either full assignment or bucket control. Under full assignment, all seats on each flight leg are assigned to a specific single- or multi-leg itinerary. Under bucket control seats are assigned to groups of itineraries. The flexible assignment approach proposed in this paper assigns some seats exclusively to each single- or multi-leg itinerary as in fixed assignment and assigns the remaining seats to groups of itineraries as in bucket control. This paper formulates the flexible assignment approach, develops rules for optimal assignment for a single-fare-class network and proves the superiority of this approach to either fixed assignment or bucket control. A numerical simulation is ised to illustrate the differences in expected revenue among these three methods of seat inventory control for four different demand scenarios.

Global Air Cargo-Industrial Complexes as Development Tools

A new economic era is being spawned by three interacting forces of immense significance: (a) the globalization of business transactions, (b) a shift to just-in-time manufacturing and inventory control methods, and (c) the growing need of firms to dispatch smaller, more frequent shipments quickly to distant markets. The ability of any state or locality in the coming decades to maximize indigenous commercial growth, expand exports, and attract major investment from around the nation and the world will require understanding the new economy and harnessing the forces creating it. In North Carolina, an examination of how these forces might be leveraged to the state's competitive advantage has led to the formulation of a global air cargo-industrial complex This proposed complex would integrate (both spatially and operationally) just-in-time manufacturing systems with airfreight systems such that the two systems function as a synergistic unit. Although some of the preliminary analysis that supports the proposed complex is specific to North Carolina, the underlying concepts may prove attractive to other states interested in exploiting major changes in production processes, transportation, and global trade to generate new economic growth.

Time requirements associated with three pharmacy inventory-control methods

Time requirements associated with three pharmacy inventory-control methods

A Recursive Algorithm for Order Cycle-time that Minimizes Logistics Cost

A firm's logistics cost, including shipping and inventory-carrying, is a substantial percentage of its sales. Nevertheless, typical inventory-control methods ignore or insufficiently represent the shipping cost. This paper describes a recursive algorithm that determines the reorder cycle-time that minimizes total logistics cost. It allows for a realistic accounting of shipping cost, which is modelled here as a function of shipping distance and weight. The algorithm uses a relaxation procedure to identify a suitable initial approximation to the optimal order cycle-time and then, through a series of recursive steps, moves to the optimal result. We demonstrate the algorithm with a single item, with a group of items that share a common order cycle, and with multi-items when item demands are random variables. Experience with this algorithm indicates that it converges to the optimal result in a very few steps.

Closed-loop job release control for VLSI circuit manufacturing

A closed-loop job release mechanism for job shops where the main source of randomness is due to machine failure and repair is introduced. The release policy adapts concepts of the reorder-point method of inventory control to the context of job-shop scheduling. The control mechanism, called starvation avoidance, is compared empirically with other input control mechanisms on several semiconductor wafer manufacturing job shops with favorable results. >

The computer in the blood bank.

This article will review the historical use of the computer in the blood bank and will show some examples of its current use today. A discussion will be included of the major areas in the blood bank where a computer would be particularly valuable and also of areas where it would be contraindicated. A few examples of the use in various institutions will be cited. Discussion of telecommunications as a possible method of inventory leveling and inventory control between blood banks will be included.

Just-in-time inventory control: A subset of channel management

Marketing managers began adopting the Economic Order Quantity (EOQ) method of inventory control from the manufacturing industry almost thirty years ago. A new approach, “Just-In-Time” inventory, pioneered by Japanese firms, should be considered. This approach consists of at least two significant phases: one, technical, based on instantaneous communication flow and the computer; and secondly, behavioral, emphasizing improved cooperation between members of the channel system.