Periodic Inventory System Research Articles

Sistem Penerapan Metode Pencatatan Dan Penilaian Persediaan Barang Dagang Di Togamas

The purpose of this study was to determine how the system of applying the method of recording and valuing merchandise inventory in TOGAMAS Toko Buku Diskon Singaraja. This research was a quantitative research. The data collection technique used was documentation. Data analysis techniques used in this study were two methods, namely the inventory assessment method consisting of the FIFO method, the LIFO method, and the Average method. The recording method was also divided into two, namely the Periodic Inventory System and the Perpetual Inventory System. All that had been examined in this study showed significant results related. For this reason, it is expected that Togamas Toko Buku Diskon Singaraja should always apply the system of recording and valuing merchandise inventory that has been carried out so far.

A periodic inventory system of intermittent demand items with fixed lifetimes

Perishable items with a limited lifespan and intermittent/erratic consumption are found in a variety of industrial settings: dealing with such items is challenging for inventory managers. In this study, a periodic inventory control system is analysed, in which items are characterised by intermittent demand and known expiration dates. We propose a new inventory management method, considering both perishability and intermittency constraints. The new method is a modification of a method proposed in the literature, which uses a periodic order-up-to-level inventory policy and a compound Bernoulli demand. We derive the analytical expression of the fill rate and propose a computational procedure to calculate the optimal solution. A comparative numerical analysis is conducted to evaluate the performance of the proposed solution against the standard inventory control method, which does not take into account perishability. The proposed method leads to a bias that is only affected by demand size, in contrast to the standard method which is impacted by more severe biases driven by intermittence and periods before expiration.

INVENTORY CONTROL SYSTEM FOR INTERMITTENT ITEMS WITH PERISHABILITY

Perishable items, with a limited lifespan and a known expiration date, are found in a variety of industrial settings. From the food to the pharmaceutical industries, the supply chains specialize their inventory control systems to handle the added complexity. These efforts are enhanced when the items present also an intermittent consumption, characterized by frequent periods without demand mixed to highly variable positive demand events. In this paper, a novel periodic inventory control system aims at bridging the gap between these two product features, managing intermittent items with expiration dates. The proposed system performs a combinatorial analysis evaluating all the demand scenarios before and after an expiration date to measure the expected fill rate. An optimization algorithm then sets the order quantity, using mathematical properties of the system to define efficient search boundaries.

Impact of Control System Structure and Performance of Inventory Goods Flow System with Long-Variable Delay

In this paper, we use a mathematical model of a inventory system with time-varying delivery delay and three control systems in order to compare their properties for the goods flow optimization problem in the inventory systems. Structures of the chosen control systems are based on mathematical discrete equations: a periodic inventory system with adaptive maximal inventory level and perpetual inventory system with adaptive order quantity level as well as the methods proposed by the authors in previous works based on the Smith predictor. The selection of the control systems parameters is done by solving optimization tasks for a specific scenario of time-varying market demand using a genetic algorithm in Matlab/Simulink. In this article, we mainly want to compare which of the control structures is able to achieve a high service level with maintaining of a given inventory maximal level in response to assumed consumer demand scenario.DOI: http://dx.doi.org/10.5755/j01.eie.24.1.14244

Evaluating shortfall distributions in periodic inventory systems with stochastic endogenous demands and lead-times

This paper addresses a multi-period production/inventory problem with two suppliers, where demand sizes and supplier lead time are stochastic and correlated. A discrete time, single item inventory system is considered, where inventory levels are reviewed periodically and managed using a base-stock policy. At the end of each period, a replenishment order is placed, which enters a queue at the buffer stage and is consequently forwarded to the first available supplier. We present a mathematical model of this inventory system and determine optimal safety stock levels for it, in closed form, using matrix analytic techniques and the properties of phase type distributions. To account for the effect of order crossovers, which occur whenever replenishment orders do not arrive in the sequence in which they were placed, the inventory shortfall distribution is analyzed. Finally, a set of numerical experiments with a system with two suppliers is presented, where the proposed model is compared to other existing models.

Adaptation of foreign experience of inventory accounting in domestic practice

This article provides a comparison of foreign and domestic experience in inventory accounting. Advantages and disadvantages of perpetual and periodic inventory systems were defined. The viability of periodic inventory system practice was investigated in the context of Ukrainian accounting system. The methodology for store accounting procedure in accordance with periodic inventory system was proposed for domestic accounts

Low carbon logistics: Reducing shipment frequency to cut carbon emissions

This study examines the issue of cutting emissions by reducing shipment frequency within the framework of periodic inventory review system, which is one of the most popular inventory control systems in practice. We first formulate a benchmark model to represent the Business-As-Usual scenario then further develop this model into a carbon emission reduction model by adding a constraint that represents the emission reduction percentage target. Because of the non-convexity of general models, we simplify our two general models into special cases and develop their propositions analytically. We then conduct comprehensive numerical experiments on the general models. Our findings suggest that by reducing shipment frequency and adjusting inventory control decisions in a periodic review system, a firm could meet a moderate emission reduction target with limited impact on total cost. Our results also show that cost associated with emission reduction is related to unit backorder cost and leadtime, while the common belief that a higher unit holding cost would lead to higher cost for emission reduction is not supported. To the best of our knowledge, no prior research has yet addressed carbon reduction considerations within the framework of periodic review inventory systems. This study provides insights in understanding in what ways the adjustment of inventory control decisions could lead to reducing carbon emissions in logistics.

Managing inventories with one-way substitution: A newsvendor analysis

This paper presents an insightful approach to analyze two-item periodic inventory systems with one-way substitution. The objective is to minimize the expected total cost per period, which consists of expected purchasing costs, expected inventory holding costs, expected shortage costs, and expected adjustment costs. This approach helps derive the optimality conditions in both single-period and infinite horizon settings and yields useful insights into the impact of substitution on the service level, the optimality of a borderline case in which the order-up-to level of the inflexible item is reduced to zero, and the pivotal role of the purchasing cost.

Journal of Law and Financial Management - Editorial

Welcome to this edition of the Journal of Law and Financial Management ( JLFM). Now in its 11th year, JLFM continues to provide a forum for the publication of research and analysis focused on the nexus of the general disciplinary areas of law (primarily business and commercial law) and financial management, encompassing all aspects of accounting and financial reporting, finance and financial economics. In our first article, Thi Nguyen, Monica Tan and Marie-Ann Cam from RMIT University examine the governance structure and practices of Australian corporate superannuation funds and the link between a fund’s governance, fees and performance. They find, in particular, a non-linear relationship between fund governance, management and fees. This study provides important insight into how the trustee structure and strategic decisions affect the funds’ operation and management of agency problems. They suggest a prescriptive governance framework is not congenial to all and instead, should be tailored to the specific needs of each fund.Next, John Parkinson from York University reproduces Skinner’s (1978) research into the gap between process costing as described in the textbooks and process costing as carried out in Australian and UK companies, in a New Zealand environment. The study revealed that the equivalent units calculation has become more common, with one factor being the adoption of Enterprise Resource Management systems, which provide fuller information than the periodic inventory system they replaced.Finally, Georgios Zekos from the OGA examines insider trading in US and EU law in his investigation on the developments on insider trading in globalisation and cyberspace. This study finds that such regulatory frameworks, albeit falling short of the daunting and often impossible task of curtailing all insider trading activity, are highly warranted and beneficial for the market as they increase investor confidence. The development of cyberspace has inhibited insider trading through enhancing information dissemination. This article highlights the importance of the collaboration of the law and economics in fortifying the market against insider trading.

A Discrete Time Markov Chain Model for a Periodic Inventory System with One-Way Substitution

This paper studies the optimal design of an inventory system with “one-way substitution” , in which a high-quality (and hence, more expensive) item fulfills its own demand and simultaneously acts as backup safety stock for the (cheaper) low-quality item. Through the use of a discrete time Markov model we analyze the effect of one-way substitution in a periodic inventory system with an (R,s,S) or (R,S) order policy, assuming backorders, zero replenishment leadtime and correlated demand. In more detail, the optimal inventory control parameters (S and s) are determined in view of minimizing the expected total cost per period (i.e. sum of inventory holding costs, purchasing costs, backorder costs and adjustment costs). Numerical results show that the one-way substitution strategy can outperform both the “no pooling” (only product-specific stock is held, and demand can never be rerouted to stock of a different item) and “full pooling” strategies (implying that demand for a particular product type is always rerouted to the stock of the flexible product, and no product-specific stock is held)− provided the mix of dedicated and flexible inputs is chosen adequately − even when the cost premium for flexibility is significant. Furthermore, we can observe that decreasing the demand correlation results in rerouting more demand to the flexible product and because of the risk-pooling effect reduces the optimal expected total cost.

Periodic Review Probabilistic Multi-Item Inventory System with Zero Lead Time under Constraint and Varying Holding Cost

Problem statement: This study treats the probabilistic safety stock n-items inventory system having varying holding cost and zero lead-time subject to linear constraint. Approach: The expected total cost is composed of three components: the average purchase cost; the expected order cost and the expected holding cost. Results: The policy variables for this model are the number of periods N*r and the optimal maximum inventory level Q*mr and the minimum expected total cost. Conclusion/Recommendations: We can obtain the optimal values of these policy variables by using the geometric programming approach. A special case is deduced and an illustrative numerical example is added.

Teaching Accounting For Inventory By Calling On Students’ Personal Experiences

This essay seeks to give practical guidance to accounting instructors seeking to convey the difficult concepts of accounting for inventory. Techniques to convey the concepts of assumed inventory flow, inventory valuation under inflation and deflation, impairment of inventories, LIFO liquidations and the concept of the periodic inventory system are considered.

Can efficient supply management in the operating room save millions?

Supply expenses occupy an ever-increasing portion of the expense budget in today's increasingly technologically complex operating rooms. Yet, little has been studied and published in the anesthesia literature. This review attempts to bring the topic of supply management to anesthesiologists, who play a significant role in operating room management. Little investigative work has been performed on supply management. Anecdotal reports suggest the benefits of a perpetual inventory system over a periodic inventory system. A perpetual inventory system uses utilization data to update inventory on hand continually and this information is linked to purchasing and restocking, whereas a periodic inventory system counts inventory at some regular intervals (such as annually) and uses average utilization to set par levels. On the basis of application of operational management concepts, ways of taking advantage of a perpetual inventory system to achieve savings in supply expenses are outlined. These include linking the operating room scheduling and supply order system, distributor-driven just-in-time delivery of case carts, continual updating of preference lists based on utilization patterns, increasing inventory turnovers, standardizing surgical practices, and vendor consignment of high unit-cost items such as implants. In addition, Lean principles of visual management and elimination of eight wastes may be applicable to supply management.

Periodic Review Probabilistic Multi-Item Inventory System with Zero Lead Time under Constraints and Varying Order Cost

This study treats the probabilistic safety stock n-items inventory system having varying order cost and zero lead-time subject to two linear constraints. The expected total cost is composed of three components: the average purchase cost; the expected order cost and the expected holding cost. The policy variables in this model are the number of periods Nr* and the optimal maximum inventory level Qmr* and the minimum expected total cost. We can obtain the optimal values of these policy variables by using the geometric programming approach. A special case is deduced and an illustrative numerical example is added.

Optimal replenishment for a periodic review inventory system with two supply modes

In this paper, we study periodic inventory systems with long review periods. We develop dynamic programming models for these systems in which regular orders as well as emergency orders can be placed periodically. We identify two cases depending on whether or not a fixed cost for placing an emergency order is present. We show that if the emergency supply mode can be used, there exists a critical inventory level such that if the inventory position at a review epoch falls below this critical level, an emergency order is placed. We also develop simple procedures for computing the optimal policy parameters. In all cases, the optimal order-up-to level is obtained by solving a myopic cost function. Thus, the proposed ordering policies are easy to implement.

On the single item fill rate for a finite horizon

We investigate expressions for expected item fill rate in a periodic inventory system. The typical treatment of fill rate found in many operations management texts assumes infinite horizon, independent and stationary demand. For the case when the horizon is finite, we show that the expected value of the actual fill rate is greater than the value given by the infinite horizon expression. The implication of our results is that an inventory manager in a finite horizon situation who uses the infinite horizon expression to set stocking levels will achieve a higher than desired expected fill rate at greater than necessary inventory expense.

A simple verification for the n-th moment of the backlog for the periodic review (s, S) inventory system1

We derive a simple method to prove the n-th moment of the warehouse backlog for the periodic (s, S) inventory system. When the difference between the warehouse order-up-to-level and the warehouse reorder point is large, under the condition that order-up-to-Ievel is approximated by infinite quantity and the renewal density function is approximated by the reciprocal of the mean review period demand.

A note on optimal policies for a periodic inventory system with emergency orders

In this article, we develop a dynamic programming model for a periodic review inventory system in which emergency orders can be placed at the start of each period, while regular orders are placed at the beginning of an order cycle (which consists of a number of periods). We assume that the regular and emergency supply lead times differ by one period. We devise a simple algorithm of computing the optimal policy parameters. Thus, the ordering policy developed is easy to implement. Scope and purpose Alternative resupply modes are commonly used in inventory systems. For example, a materials manager could choose to replenish the inventory of an item by air if its inventory position gets dangerously low. In this article, we study a periodic review inventory system in which there is an emergency supply mode in addition to a regular supply mode. We develop optimal ordering policies that minimize the total expected discounted cost of procurement, holding, and shortage over a finite planning horizon. These optimal policies are next shown to converge as the planning horizon is extended, if some conditions that are easy to hold are satisfied. Finally, we derive an algorithm which involves solving only a one-order-cycle dynamic program for the optimal policy parameters.

Pooling in multi-location periodic inventory distribution systems

Risk pooling through lateral transshipment in inventory distribution systems is an effective means of improving customer service and reducing total system costs. The objective of this paper is to study the performance of an inventory system with one central warehouse and multiple retail outlets, collaborating in the case of imminent shortage by moving inventory between them. The analysis concentrates on the case of three outlets (stocking locations), which captures most of the characteristics and tradeoffs of multi-location systems with complete pooling. In addition to determining order-up-to quantities for the stocking locations, the decision maker must also specify the details of the transshipment policy when one or two locations face shortages. Simulation with a wide choice of model parameters leads to some very interesting and practically useful conclusions, including the following: (a) the benefits of risk pooling through transshipment are substantial and increase with the number of pooled locations; (b) the type of transshipment policy in case of shortages does not affect significantly the system's performance; and (c) it is preferable to form “balanced” pooling groups, consisting of locations that face similar demand.

Expressions for item fill rates in periodic inventory systems

We examine the problem of estimating the item fill rate in a periodic inventory system. We show that the traditional expressions for line item fill rate, found in many operations management textbooks, perform well for high fill rates (above 90%), but they consistently underestimate the true fill rate. The problem of underestimation becomes significant as the fill rate falls below 90% and is greatly amplified in cases with very low fill rates (below 50%). We review other more accurate expressions for fill rate, discussing their relative merits. We then develop an exact fill rate expression that is robust for both high and low fill rates. We compare the new expression to others found in the literature via an extensive set of simulation experiments using data that reflect actual inventory systems found at Hewlett-Packard. We also examine the robustness of the expressions to violations in the underlying assumptions. Finally, we develop an alternative fill rate expression that is robust for cases of high demand variability where product returns are allowed. © 1995 John Wiley & Sons, Inc.