Safety Stock Research Articles

Coordinating visit interval and safety stock decisions in a two-level supply chain with shelf-life considerations

In many real-world situations, a distributor visits a downstream retailer to receive orders of products with fixed shelf-life and then delivers them after a lead-time. Under such circumstances, the retailer should determine its safety stock level by considering the demand uncertainty and the distributor's visit interval. In this paper, we coordinate the safety stock level of the retailer with the visit interval and the replenishment policy of the distributor, where the distributor is subject to two types of shelf-life constraints: (1) fixed shelf-life for the product, and (2) minimum remaining shelf life required by the retailer. A fair profit-sharing strategy is developed to coordinate the investigated SC and to encourage both members to participate in a joint decision-making scheme. The results reveal that the proposed coordination policy not only coordinates the SC of products with fixed shelf-life but also significantly improves the customer service level (CSL) and the profits of the entire SC and its agents. Further, sensitivity analyses have been carried out to analyze the performance of the proposed coordination model under different circumstances.

ANALISIS MANAJEMEN PERSEDIAAN MENGGUNAKAN METODE ECONOMIC ORDER QUANTITY DAN REORDER POINT DALAM PENGENDALIAN PERSEDIAAN GAS LPG 3 KG PADA SPBE PT.BCP CIREBON

Management accounting in inventory management is critical in determining theamount of inventory by company management. Demand rises and falls as a resultof public demand. When the price of 3 kg LPG gas rises due to increased publicdemand, it can cause a shortage of goods, resulting in price instability in themarket. The aim of this study was to determine the analysis of 3 kg LPG gasinventory management in determining the optimal quantity using the EconomicOrder Quantity (EOQ) method, determining the right Reorder Point (ROP),efficient total inventory-costs, and safety stock inventories in controlling thesupply of LPG gas at SPBE PT BCP Cirebon. This study utilized the descriptive qualitative research method with primary and secondary data sources. Theconclusion shows that (EOQ) and (ROP) methods are more effective and efficientif they can be applied to SPBE PT BCP. The average purchase quantity of themost optimal inventory EOQ method is 58,092 kg with a frequency of 184 timesper year, safety stock quantity is 102,900 kg, ROP will be conducting if theremaining inventory is 138,214 kg, and the total cost of inventory is more efficientat Rp. 61,037,316.6

Strategies for achieving customer order flexibility – supplier perspective

PurposeThe purpose of this study is to develop a framework of strategies to achieving customer order flexibility in and related to the order-to-delivery (OTD) process. The purpose is also to investigate how companies prioritize various strategies to achieve customer order flexibility.Design/methodology/approachBased on a literature review, pre-tests and conceptual reasoning, a conceptual framework of strategies related to the order-to-delivery process was developed. The strategies were linked to the order quantity and delivery lead-time flexibility dimensions. This structure resulted in six groups covering enabling as well as remedial strategies. An empirical interview study of ten customer–supplier relationships was conducted.FindingsThe interviews identified additional strategies, thereby expanding the framework. The enabling strategies with the highest median values were “have continuous contact with the customer's purchaser” and “use safety stock of raw materials/semi-finished products”. The remedial strategy with the highest median was “re-plan/re-prioritize the order backlog”. In the delivery sub-process, it was more common to apply remedial strategies for delivery lead-time than for order quantities.Research limitations/implicationsThe developed framework is a contribution to the literature on operational flexibility in and related to the OTD process. It complements existing knowledge by taking a supplier perspective.Practical implicationsSuppliers can use the framework as a tool to understand and systematically achieve better customer order flexibility in and related to the OTD process. Customers can use the framework as a checklist for supplier evaluation and supplier development.Originality/valueFew identified studies include empirical data on customer order flexibility.

Clustering-based solution approach for a capacitated lot-sizing problem on parallel machines with sequence-dependent setups*

This paper studies an industrial lot-sizing and scheduling problem coming from the food-industry that extends the multi-item capacitated lot-sizing and includes lost sales, overtimes, safety stock and non-uniform sequence-dependent setups on parallel machines. We introduce two different formulations and adapt the well-known Relax-and-Fix and Fix-and-Optimise heuristics in order to quickly obtain feasible solutions on large industrial instances. The complexity of our problem prevents the procedure to obtain good solutions within the time allocated by practitioners on real-life cases, hence we propose to use a clustering approach to approximate the sequence-dependent setup times. The resulting problem is significantly smaller to solve and experimental results suggest that this transformation effectively improves the solutions found on industrial instances. In particular, the combination of this clustering method and Relax-and-Fix and Fix-and-Optimise procedure turns out to be a promising approach to obtain good solutions in the given time-limit.

Analisis fluktuasi jumlah produksi gula tebu perbandingan bertahap triangular fuzzy inference system

Sugar production owned by PT X (Persero) for the last 10 years still shows fluctuation. One of the factors is climate, including rainfall. Judging from the development, sugarcane is still vulnerable to the climate. Even so, there are still strategies to reduce the resulting risks, including by means of an appropriate cropping system. However, the safety stock of raw materials cannot be maintained because the quality of the sugarcane deteriorates very quickly. Therefore, sugarcane is continuously sourced in varying quantities and qualities from hundreds of geographically dispersed varieties and supplied to the milling process and due to changing weather conditions so that throughout the year, the time window must be considered for harvesting. Fuzzy logic is a science of uncertainty that has superior ability to process reasoning in language. In fuzzy logic theory, it is known that the concept of fuzzy systems is used in the prediction process and generally contains four stages: fuzzification, formation of fuzzy rules, fuzzy inference system reasoning, and defuzzification. Variable rainfall (mm/year), average yield (%/year), total sugarcane production (million tonnes/year) based on a triangular model of incremental uncertainty as an information attribute in the Fuzzy Inference System (FIS). The selection obtained by using the fuzzy inference system is approximately 5 points from the uncertainty factor that arises from the effect of the input on the total output of the resulting sugar cane production.

Integrating Mathematical and Simulation Approach for Optimizing Production and Distribution Planning With Lateral Transshipment in a Supply Chain

Supply chain planning aims to maximize the chain's profit and find an effective way to integrate production and distribution. A mathematical and simulation-based optimizations are two common disciplines in which this study integrates both of them together to consolidate their advantages. A mathematical model is formulated to find an optimal production-distribution plan. Then, the result is fed into a simulation model operating under uncertainty to verify the feasibility of the plan. Our integrated approach tries to find a feasible plan that satisfies both required customer service level and makespan limitation where safety stock is used to hedge against uncertainties, and lateral transshipment is used for emergency measures against excessive fluctuation of customer demand. A case study that optimizes the profit of an entire chain is used to demonstrate the algorithm. The outcomes of the study show that our proposed approach can yield feasible results (with near or even optimal solution) with much faster computational time as compared to the traditional simulation-based optimization.

Low yield but high levels of multidrug resistance in urinary tract infections in a tertiary hospital, Nepal.

There are concerns about the occurrence of multidrug resistance (MDR) in patients with urine tract infections (UTI) in Nepal. To determine culture positivity, trends in MDR among Escherichia coli and Klebsiella pneumoniae infections and seasonal changes in culture-positive UTI specimens isolated from 2014 to 2018 at the B P Koirala Institute of Health Sciences, Dharan, Eastern Nepal. This was a cross-sectional study using secondary laboratory data. Among 116,417 urine samples tested, 19,671 (16.9%) were culture-positive, with an increasing trend in the number of samples tested and culture positivity. E. coli was the most common bacteria (54.3%), followed by K. pneumoniae (8.8%). Among E. coli and K. pneumoniae isolates, MDR was found in respectively 42.5% and 36.0%. MDR was higher in males and people aged >55 years, but showed a decreasing trend over the years. The numbers of isolates increased over the years, with a peak always observed from July to August. Low culture positivity is worrying and requires further work into improving diagnostic protocols. Decreasing trends in MDR are a welcome sign. Information on seasonal changes that peak in July-August can help laboratories better prepare for this time with adequate buffer stocks to ensure culture and antibiotic susceptibility testing.

Moderating Effect of Environmental Uncertainties on the Relationship between Risk Hedging Supply Chain Strategy and Performance of Manufacturing Firms in Kenya

The manufacturing sector in Kenya is faced by the challenges of performance and unstructured supply chain strategy. Further, the manufacturing sector growth in 2014 was 3.4% compared to a 5.6% growth in 2013 (Waiguru, 2015). This slow growth in manufacturing sector performance can be attributed to several environmental uncertainties such as the general election, high production costs, supply disruptions, political stability, unavailability of raw materials or demand fluctuations, technological changes, employees’ strikes, financial risk, terrorism and competition from imported goods (KNBS, 2018).The purpose of the study was to determine the moderating effect of environmental uncertainties on the relationship between risk hedging supply chain strategy and performance of manufacturing firms in Kenya. The study utilized descriptive research design. The target population was 829 managers from manufacturing firms around the country. A sample of 270 managers was selected using stratified random sampling. Results indicated that risk hedging supply chain strategy explained 63.8% of the total variations in performance of manufacturing firms. In addition, risk hedging supply chain strategy had a positive and significant effect on firm performance (β=0.675, P < .000). With introduction of moderating variable (environmental uncertainties); risk hedging supply chain strategy explained 34% of the total variations in performance of manufacturing firms. This denoted those environmental uncertainties had a negative moderating effect on the relationship between risk hedging supply chain strategy and performance of manufacturing firms in Kenya. The study concluded that risk hedging supply chain strategy had a positive and statistically significant effect on performance of manufacturing firms in Kenya. The study further concluded that environmental uncertainties lower the effect of risk hedging supply chain strategy on firm performance. The study recommends that manufacturing firms should strengthen aspects related to risk hedging supply chain strategy. The firms should particularly strengthen safety stock, suppliers’ management and quality. The improvement of these aspects is expected to enhance performance of the manufacturing firms. This study further recommends that manufacturing firms should factor in environmental uncertainties related to demand, supply and technology when implementing supply chain strategies.

Inventory Cost Reduction and EOQ for Personal Protective Equipment: A Case Study in Oil and Gas Company

Personal Protective Equipment (PPE) is one of materials that is urgent for oil and gas companies. Company X is an upstream oil and gas company located in Indonesia that requires its employees to wear PPE. Therefore, the PPE inventory must be controlled carefully to maintain the level of PPE inventory. This research has an objective to reduce PPE inventory cost through the application of Economic Order Quantity (EOQ) method. To achieve this objectives, a research was conducted to 22 items of PPE in Company X. The research was conducted by forecasting PPE demand, calculating optimal quantity and ordering frequency, calculating safety stock and reorder point, and finally calculating the inventory cost reduction. The result shows that the implementation of EOQ has enabled the company to reduce its inventory cost by 19.72%. Therefore, it is advisable for Company X to design and implement EOQ as the inventory control program for PPE.

Safe grain storage- post harvest technology: an Indian perspective

Due to green revolution and technological advancement in crop production, India has attained sufficiency in food grain productivity, yet a large population in our country goes hungry. The major reason for this is the postharvest losses that occur during storage, procurement and distribution. Factors such as improper and inadequate storage facilities, climatic conditions, ineffective management policies lead to physical, chemical and biological deterioration of food grains. Abiotic factors such as grain moisture content, temperature, initial grain condition and aeration system are crucial considerations for safe storage. Biological deterioration and losses due to fungi, mites, insects, birds and rodents are also significant. In India, Food Corporation of India (FCI) is the nodal agency, under the Ministry of consumer affairs, responsible for procurement of food grains at minimum support price (MSP), movement of produce to deficit regions, public distribution system (PDS) and maintenance of buffer stocks. Government of India constituted a high-level Shanta Kumar Committee in 2014 to recommend ways to rationalize and minimize postharvest losses, in addition to the already existing government policies. Futuristic approach to prevent these losses are to have bold and proactive reforms in India's grain management systems by implementing the recommendations of the Committee, using appropriate storage protocols, continuing subsidy only to the poor under Antyodaya Anna Yojna (AAY), controlling the subsidized grain distribution under NFSA (National Food Security Act-2013), intervention of private sectors and liquidation of stocks to contain inflation.

Vaccine supply chains in resource-limited settings: Mitigating the impact of rainy season disruptions

Immunization is widely recognized as one of the most successful and cost-effective health interventions, preventing two to three million deaths from vaccine-preventable diseases each year. Although progress has been made in recent years, substantial operational challenges persist in resource-limited settings with frequent stock-outs contributing to sub-optimal immunization coverage and inequality in vaccine access. In this paper, we investigate the role of rainy season induced supply chain disruptions on vaccination coverage and inequalities. We develop a modeling framework combining spatial modeling—to predict flood disruptions in road networks—and a discrete-event simulation of a multi-tiered vaccine supply chain (VSC). Our models are fitted using data from the Malagasy VSC network and validated to the best extent possible with scarce data. Our baseline simulation predicts the national vaccination coverage with good accuracy and suggests that 67% of regions with low reported immunization coverage are affected by rainy season disruptions or operational inefficiencies, causing significant geographical inequalities in vaccine access. We investigate various mitigation strategies to increase the resiliency of VSCs and find that, by strategically placing buffer inventory at targeted facilities prior to the rainy season, the proportion of children receiving all basic vaccines in these areas is increased by 8% and the geographical inequality in vaccination coverage between areas affected and not affected by the rainy season is reduced by 11%. By also increasing the replenishment frequency from every third month to every month, the national vaccination coverage improves by 41%. Our results contribute to achieving the UN Sustainable Development Goals (SDGs) by providing actionable insights for improving vaccination coverage (SDG 3) and investigating the resiliency of the VSC to increased flooding due to climate change (SDG 13).

The importance of vaccine stockpiling to respond to epidemics and remediate global supply shortages affecting immunization: strategic challenges and risks identified by manufacturers

While stockpiling vaccines adds another layer of complexity to vaccine manufacturing, it constitutes a crucial component of comprehensive disease preparedness and control strategies in public health management. Stockpiling provides the ability to immediately respond to epidemics, disease outbreaks, vaccine shortages or stock-outs at local, regional or global levels. Some stockpiles are static, not shipped until an emergency occurs; other stockpiles are rotating with vaccines used in on-going routine immunization programmes. Programmatic use indicates which vaccines to stockpile, the nature of the stockpile and the amount of vaccine to be held at any time. For immediate shipment, fully released product must be stockpiled with the challenge of monitoring remaining shelf-life requirements and the potential risk of expiry. Existing stockpiles are managed and financed globally under the purview of international organizations in the global immunization community, except for buffer stocks held by manufacturers for short periods. The added challenges to manufacturers of stockpiling vaccines, including storage, human resources and other related costs including vaccine destruction when no longer useable, needs to be recognized. This is all the more so with the likelihood of vaccine stockpiling becoming more prominent with changing disease patterns due to climate change and population movements, as well as the significant investment in the research and development of new epidemic prevention vaccines. While vaccine stockpiles managed and financed globally provide rapid response to country requests, more attention is needed in the future to ways that vaccine stockpiling can be brought under the direct purview of individual countries or regional groupings.

Inventory Planning for XYZ Mart using EOQ and Monte Carlo

XYZ Mart is a convenience store in Tulungagung regency. Founded in 2012, this store is designed to serve the daily needs of surrounding residents. In addition, this store also caters for the needs of families visiting patients at the hospital in front of XYZ Mart. Along with the store growth, there are more and more customers, and so the more demand. To handle the increasing demand, the store has to increase its inventory of goods. Problems arise when the number of goods keep increasing while the store inventory space does not. Therefore, in order to avoid overstocking or understocking, a research and planning are conducted to determine the optimal number of an order. The method used for inventory optimization is Economic Order Quantity (EOQ) to calculate the most optimal number of goods ordered. To anticipate the uncertainty of demand, Safety Stock (SS) is also used. To determine the average demand per year based on historical data, as a basis for EOQ and SS calculations, a Monte Carlo simulation is used. The expected outcome of this research is to provide recommendations of when and how much goods must be ordered so that the store can optimally use its limited space of inventory.

Inventory Planning for XYZ Mart using EOQ and Monte Carlo

XYZ Mart is a convenience store in Tulungagung regency. Founded in 2012, this store is designed to serve the daily needs of surrounding residents. In addition, this store also caters for the needs of families visiting patients at the hospital in front of XYZ Mart. Along with the store growth, there are more and more customers, and so the more demand. To handle the increasing demand, the store has to increase its inventory of goods. Problems arise when the number of goods keep increasing while the store inventory space does not. Therefore, in order to avoid overstocking or understocking, a research and planning are conducted to determine the optimal number of an order. The method used for inventory optimization is Economic Order Quantity (EOQ) to calculate the most optimal number of goods ordered. To anticipate the uncertainty of demand, Safety Stock (SS) is also used. To determine the average demand per year based on historical data, as a basis for EOQ and SS calculations, a Monte Carlo simulation is used. The expected outcome of this research is to provide recommendations of when and how much goods must be ordered so that the store can optimally use its limited space of inventory.

Green revolution to grain revolution: Florigen in the frontiers

Burgeoning human population dents, globally, the brimming buffer stock as well as gain in food grain production. However, an imminent global starvation was averted through precise scientific intervention and pragmatic policy changes in the 1960s and was eulogized as the “Green Revolution”. Miracle rice and wheat obtained through morphometric changes in the ideotype of these two crops yielded bumper harvest that nucleated in Asia and translated into Latin America. The altered agronomic traits in these two crops were the result of tinkering with the phyto-hormone “Gibberellin’. Recently, another plant hormone ‘Cytokinin’ has gained prominence for its involvement in the grain revolution in rice and other field crops. Suo moto homeostasis of CK by the cytokinin oxidase enzyme governs the cardinal shoot apical meristem that produces new flowering primordia thereby enhancing grain number. Similarly, the flowering hormone ‘Florigen’ impacts sympodia formation, flowering, and fruit production in tomato. The role of heterozygosity induced heterosis by florigen in revolutionizing tomato production and cellular homeostasis of CK by CK oxidising enzyme (CKX) in enhancing rice production has been path-breaking. This review highlights role of phytohormones in grain revolution and crop specific fine-tuning of gibberellins, cytokinins and florigen to accomplish maximum yield potential in field crops.

Analysis and Control for Heavy Equipment Spare Parts Inventory in the Nickel Mining Industry

In the mining industry, analyzing, and controlling the spare parts inventory is important activities and need special attention from the company. The high production cost of the mining industry, including spare parts and shortages costs affects the financial and operational aspects of the company. Spare parts inventory management policy is critical to increase the service level and minimize spare parts cost. In this mining case study, the out of stock incidents in the heavy equipment spare parts were often occurring and significantly affecting the performance of maintenance and operations. The purpose of this study is to determine minimum stock (safety stock) and maximum stock to reduce overstocks and reduce the number of stocks out in spare parts inventory and as well as inventory cost. The method used to solve the problem is economic order quantity (EOQ) and continuous review control (S, s) to determine the minimum and maximum stocks. Determining the combination of S and s has a major impact on the success of inventory control. Substitution parts are subdivided into alphabetical values to determine their significance. As a result of calculating inventory value using EOQ and S, s will get the highest inventory value to reduce inventory costs.

A Model of Supplier Selection Under Vendor Managed Inventory Contract

VMI is the main concept for gaining accurate information and information sharing from customers to suppliers to achieve low safety stock levels, efficient inventory cost, and a reduction of ordering cost. There are many suppliers who supply spare part products under the VMI contract. Therefore, the company needs to make a decision for selecting a qualified supplier in order to improve customer service level and customer satisfaction. In addition, the uncertainty and vagueness of the expert's opinion is the prominent characteristic of the problem. Therefore an extensively used multi-criteria decision-making tool AHP can be utilized as an approach for supplier selection problems. This paper reveals the application of AHP model determining the best supplier with respect to selected criteria for selecting the best supplier under the VMI contract among the alternatives. There are criteria in this study namely quality, price, delivery, service, supplier’s background, and Information technology which include thirty subcriteria covers in the VMI contract. This research might be identified the critical criteria for supplier selection under the VMI contract.

ANALISIS PENGENDALIAN PERSEDIAAN PAKAN TERNAK SAPI PADA PT INDO PRIMA BEEF DI KABUPATEN LAMPUNG TENGAH

The purposes of this study are to analyze cost-efficient control of feed raw material inventory, anticipate shortages of supply, determine the correct time frame for reordering raw materials at the feedlot company PT Indo Prima Beef using the Economic Order Quantity (EOQ) mathematical model and determine the inventory value of raw materials with the First In First Out (FIFO) assessment model. Data collection was carried out in March-May 2020 using a case study method. The data used were primary data collected using questionnaires and secondary data from literature studies. The results showed that the inventory cost applied by PT Indo Prima Beef was different from the calculation of the EOQ model. According to EOQ analysis, the largest amount of safety stock is corn sugarcane as much as 139,725.95 kg, and the lowest amount is salt around 870.63 kg. The reorder point for PT Indo Prima Beef with the largest amount was dry onggok as much as 139,926 kg, while the lowest amount was 724.87 kg of salt. PT Indo Prima Beef uses a perpetual recording system with the First In First Out (FIFO) inventory valuation method with a total raw material inventory value of IDR2,129,685,820 in one year.Key words: EOQ,FIFO, inventory, supplies

ANALISIS ECONOMIC ORDER QUANTITY TERHADAP PREDIKSI PERSEDIAAN (STUDI EMPIRIS PADA UMKM MANUFAKTUR DI KOTA BANDA ACEH)

According to data from the Aceh Cooperative and the Office of Small and Medium Enterprises in the past three years, the number of small and medium enterprises has increased by 25%. The contribution of SMEs to Aceh’s GRDP reached 55.56%. Various programs have also been implemented to improve the performance of small and medium-sized enterprises. One of them is inventory management at the lowest cost. This study aims to determine the economic order quantity of raw materials and compare the total cost of raw material inventory, as well as the use of economic order quantity (EOQ) to carry out safety stock and reorder levels for manufacturing companies in Banda Aceh. EOQ is the best or most economic order quantity to be used according to the period cost.This study selected ten manufacturing MSME samples in Banda Aceh. It shows that the results of using the EOQ method to order cost information are different from the calculation of the strategy implemented by the company. The frequency of ordering raw materials used to be fixed at 12 times, but it has now been reduced to ensure ordering costs

Penerapan Sistem Manajemen Persediaan Bahan Baku untuk Menekan Inventory Cost Menggunakan Metode Economic Order Quantity

PT. Inkomas Lestari is the first and only producer from Indonesia to produce tin chemicals and polymer additives. The products produced by PT. Inkomas Lestari is not only able to meet the needs of the local market, but also meet the needs of the international market by exporting its products to Germany, Korea, China and several countries in the Asian region. However, based on the results of the evaluation conducted by researchers, PT. Inkomas Lestari is known to not optimize its inventory management, in which the company does not keep stock of raw material inventory in the warehouse, so that it often experiences an increase in inventory costs. This research was conducted with the aim of reducing inventory costs by calculating the safety stock needed by the company using the Economic Order Quantity (EOQ) method. Based on the calculation results, it is known that PT. Inkomas Lestari with the EOQ method obtained a total inventory cost of Rp. 1,888,637,963 which is lower than the company using the conventional method which has to pay Rp. 2,112,320,822, then with a difference in total inventory cost of Rp. 223,682,857. This means that the Economic Order Quantity (EOQ) method can be considered more efficient than the conventional method currently being applied by the company.