scholarly journals Mathematical Model of (R,Q) Inventory Policy under Limited Storage Space for Continuous and Periodic Review Policies with Backlog and Lost Sales

2017 ◽  
Vol 2017 ◽  
pp. 1-9 ◽  
Author(s):  
Kanokwan Singha ◽  
Jirachai Buddhakulsomsiri ◽  
Parthana Parthanadee
Keyword(s):  
Lead Time ◽  
Empirical Distribution ◽  
Problem Instance ◽  
Lost Sales ◽  
Storage Space ◽  
Optimal Solutions ◽  
Periodic Review ◽  
Continuous Review ◽  
Mathematical Expressions ◽  
Space Capacity

This paper involves developing new mathematical expressions to find reorder point and order quantity for inventory management policies that explicitly consider storage space capacity. Both continuous and periodic reviews, as well as backlogged and lost demand during stockout, are considered. With storage space capacity, when on-hand inventory exceeds the capacity, the over-ordering cost of storage at an external warehouse is charged on a per-unit-period basis. The objective is to minimize the total cost, consisting of ordering, shortage, holding, and over-ordering costs. Demand and lead time are stochastic and discrete in nature. Demand during varying lead time is modeled using an empirical distribution so that the findings are not subject to assumptions of demand and lead time probability distributions. Due to the complexity of the developed mathematical expressions, the problems are solved using an iterative method. The method is tested with problem instances that use real data from industry. Optimal solutions of the problem instance are determined by performing exhaustive search. The proposed method can effectively find optimal solutions for continuous review policies and near optimal solutions for periodic review policies. Fundamental insights about the inventory policies are reported from a comparison between continuous review and periodic review solutions, as well as a comparison between backlog and lost sales cases.

scholarly journals Optimal Cycle Service Level for Continuous Stocked Items with Limited Storage Capacity

2018 ◽  
Vol 4 (2) ◽  
pp. 82
Author(s):  
Kanokwan Singha ◽  
Jirachai Buddhakulsomsiri ◽  
Parthana Parthanadee
Keyword(s):  
Inventory Management ◽  
Service Level ◽  
Storage Space ◽  
Continuous Review ◽  
Holding Cost ◽  
Total Inventory ◽  
Review Cycle ◽  
Capacity Cost ◽  
Inventory Holding ◽  
Space Capacity

This paper involves determining an optimal cycle service level for continuously stocked items that explicitly considers storage space capacity. Inventory management is under a continuous review policy. The total inventory management cost consisting of ordering cost, inventory holding cost, shortage cost, and over-capacity cost. Shortage items are assumed to be backlogged. A numerical example is provided to demonstrate the method. Keywords: Continuous Review; Cycle Service Level; Storage Space Capacity; Over-Capacity Cost

scholarly journals ANALISA PENGENDALIAN PERSEDIAAN PLAT BAJA DENGAN METODE CONTINUOUS REVIEW (Q) DAN PERIODIC REVIEW (P) DI CV. TDSA

2020 ◽  
Vol 15 (1) ◽  
pp. 44-56
Author(s):  
Enny Aryanny ◽  
Faisal Fahmi Fasya
Keyword(s):  
Steel Plate ◽  
Consumer Demand ◽  
Cost Savings ◽  
Retail Trade ◽  
Lost Sales ◽  
Periodic Review ◽  
Inventory Cost ◽  
Continuous Review ◽  
Inventory Costs ◽  
Total Inventory

Persediaan adalah sumber daya yang disimpan untuk memenuhi permintaan saat ini dan mendatang. CV. TDSA merupakan sebuah perusahaan yang bergerak dalam bidang persediaan, perdagangan eceran dan layanan jasa reparasi atau pemeliharaan kapal. Salah satu material metal yang menjadi bahan pembentuk kapal adalah metal jenis plat baja. Perusahaan ini mempunyai permasalahan dalam pengendalian persediaan plat baja yang disebabkan oleh tinggi rendahnya permintaan konsumen yang fluktuatif (probabilistik) sehingga terjadi kekurangan persediaan yang mengakibatkan permintaan konsumen tidak terpenuhi dan kelebihan persediaan yang akan mengakibatkan tingginya biaya persediaan. Tujuan dari penelitian ini adalah melakukan pengendalian persediaan plat baja dengan permintaan yang fluktuatif sehingga dapat meminimumkan biaya persediaan. Pengendalian persediaan dilakukan dengan metode continuous review (Q) dan periodic review (P) lostsales yang akan dibandingkan dengan metode perusahaan dan dipilih metode terbaik dengan total biaya paling minimum. Hasil perhitungan didapatkan total biaya persediaan minimum adalah dengan metode continuous review (Q) lost sales sebesar Rp. 2.024.742.100 dengan metode perusahaan sebesar Rp. 2.264.569.500 sehingga didapatkan penghematan biaya sebesar Rp. 239.827.400 dan efisiensi sebesar 10,59%. Jumlah pemesanan per pesan bulan Oktober 2019 – September 2020, sebesar 11 lbr dengan total biaya persediaan sebesar Rp. 2.421.361.800.   Kata Kunci: Continuous, Periodi Review, Persediaan, Probabilistik.   ABSTRACT Inventories are resources that are stored to meet current and future demand. CV. TDSA is a company engaged in the supply, retail trade and ship repair or maintenance services. One of the metal materials that form a ship is a steel plate type metal. This company has problems in controlling steel plate inventory caused by high and low fluctuating (probabilistic) consumer demand so that there is a shortage of inventory that results in unmet consumer demand and inventory oversight which will result in high inventory costs. The purpose of this study is to control steel plate inventory with fluctuating demand so as to minimize inventory costs. Inventory control is carried out by the continuous review (Q) and periodic review (P) lost sales methods which will be compared with the company method and the best method is chosen with the minimum total cost. The calculation result shows that the minimum total inventory cost is the continuous sales (Q) lost sales method of Rp. 2,024,742,100 with the company method of Rp. 2,264,569,500 so that a cost savings of Rp. 239,827,400 and efficiency of 10.59%. The number of orders per message in October 2019 - September 2020, is 11 lbr with a total inventory cost of Rp. 2,421,361,800.   Keywords: Continuous, Inventory, Period Review, Probabilistic.

Optimization Models for the Continuous Review Inventory System

2017 ◽  
Vol 8 (1) ◽  
pp. 1-21 ◽  
Author(s):  
Barry R. Cobb
Keyword(s):  
Lead Time ◽  
Cost Model ◽  
Mixture Distribution ◽  
Optimal Order ◽  
Lost Sales ◽  
Review System ◽  
Continuous Review ◽  
Demand Distribution ◽  
Correct Model ◽  
Spreadsheet Software

Businesses that carry inventory as a means of responding to customer demand must decide when to place inventory orders and how much to order. A model for selecting an optimal order quantity and reorder point in the continuous review system is implemented in spreadsheet software. Historical data on period demand and lead time is processed by performing a statistical test to select a mixture distribution for lead time demand. This distribution is incorporated into an expected shortage calculation and cost model where shortages incur lost sales and/or goodwill costs. The lead time demand distribution selection is evaluated through experiments. In examples, employing an incorrect distribution leads to expenditures between one and eighteen percent higher than those experienced with the correct model. A mismatch of the backorder or lost sales model with the correct underlying assumptions leads to expenses between four and thirteen percent larger than necessary in an example problem.

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