A MODIFIED ECONOMIC PRODUCTION QUANTITY (EPQ) WITH SYNCHRONIZING DISCRETE AND CONTINUOUS DEMAND UNDER FINITE HORIZON PERIOD AND LIMITED CAPACITY OF STORAGE

The most popular inventory model to determine production lot size is the Economic Production Quantity (EPQ) model. It aids enterprises on how to minimize the total of production costs by reducing the inventory cost. However, the three main parameters in EPQ model, demand, set up cost, and holding cost, are not sufficient enough to solve current inventory issues. When an enterprise has two types of demand, continuous and discrete demands, the basic EPQ model would be no longer useful. Continuous demand comes from customers who want their demand to be fulfilled every time per unit time, while the fulfilment of discrete demand is at a fixed interval of time. Literature review is conducted to observe other formulations of EPQ model. As literature dealing with this problem cannot be found, this study aims to develop an EPQ model considering the two types of demand simultaneously. Therefore, this research proposes a modified EPQ model considering both continuous and discrete demands under finite horizon period. To find the solution of the model, three solution approaches were developed: (1) procedure approach, (2) algorithm approach, and (3) simultaneous approach. A numerical example is used to demonstrate the model. The solutions of the numerical example obtained using the three solution approaches are discusse

A Multiple Items EPQ/EOQ Model for a Vendor and Multiple Buyers System Considering Continuous and Discrete Demand Simultaneously

This is the author accepted manuscript. The final version is available from IOP Publishing via the DOI in this record.APCOMS-IMEC 2017: joint conference of The 4th Asia Pacific Conference on Manufacturing Systems and The 3rd International Manufacturing Engineering Conference, 7-8 December 2017, Yogyakarta, IndonesiaThis paper proposed a mathematical model for multiple items Economic Production and Order Quantity (EPQ/EOQ) with considering continuous and discrete demand simultaneously in a system consisting of a vendor and multiple buyers. This model is used to investigate the optimal production lot size of the vendor and the number of shipments policy of orders to multiple buyers. The model considers the multiple buyers’ holding cost as well as transportation cost, which minimize the total production and inventory costs of the system. The continuous demand from any other customers can be fulfilled anytime by the vendor while the discrete demand from multiple buyers can be fulfilled by the vendor using the multiple delivery policy with a number of shipments of items in the production cycle time. A mathematical model is developed to illustrate the system based on EPQ and EOQ model. Solution procedures are proposed to solve the model using a Mixed Integer Non Linear Programming (MINLP) and algorithm methods. Then, the numerical example is provided to illustrate the system and results are discussed

Model EPQ Multi Item yang Dimodifikasi untuk Dua Permintaan secara Simultan

Inventory is one of many factors of the business operation that need to be controlled by industries in order to improve efficiency, enhance productivity, and decrease the holding cost. The holding cost of inventories in supply chain contribute to 20% - 40% of the product value. It can be controlled by applying appropriate inventory model, such as EPQ/Economic Production Quantity and EOQ/Economic Order Quantity. EPQ is an inventory model that used to determine the optimum production lot size with balanced the production setup cost and holding cost. Even the classic EPQ has applied widely in industries, the assumption used by this model differed between the researchers whether it is continuous or discrete demand, because the multi delivery or discrete demand is mostly used by industries. Even so, there are industries that used both continuous and discrete demand simultaneously. Based on previous research, there was an advanced EPQ model that synchronizing both assumptions simultaneously, but it still addressed single item problem. Since almost the industries produced multi item, this model has lack of applicability. Therefore, this research proposed a multi item EPQ Model that synchronizing continuous and discrete demand simultaneously. The solution procedure that used in this proposed model are classical calculus method/differential calculus and simultaneous approach. A numerical example is given to show the effectiveness of the proposed approach based on the data from the literature

Pengembangan Model EPQ dengan Variasi Biaya Setup dan Biaya Penyimpanan serta Pengiriman Diskrit

Makalah ini mengkaji kebijakan inventori pada perusahaan yang memiliki kapasitas gudang terbatas sehingga pengiriman barang harus dilakukan secara diskrit serta mempertimbangkan variasi biaya setup yang meningkat berdasarkan lama waktu produksi dan biaya penyimpanan yang meningkat sesuai fungsi waktu penyimpanan. Tujuan dari penelitian adalah untuk mengembangkan model Economic Production Quantity (EPQ) dan meminimasi total biaya inventori dengan mempertimbangkan faktor-faktor yang telah disebutkan sebelumnya. Terdapat dua kasus yang dikaji yaitu variasi biaya setup yang dikombinasikan dengan variasi biaya penyimpanan (H). Metode optimasi digunakan untuk mendapatkan waktu siklus (T) optimal. Berdasarkan T optimal yang dihasilkan, dihitung nilai waktu produksi (Tp), jumlah produksi (Q), jumlah pengiriman (m), kapasitas pengiriman (k), dan total biaya optimal. Perhitungan numerik menunjukkan bahwa 2 model yang dihasilkan dapat menurunkan total biaya secara keseluruhan. Penurunan nilai TC* terbesar dicapai pada saat β=1 dan ε=0,4 yaitu sebesar $3.967 (0,198$2.607 (0,130%).

A parameter-tuned genetic algorithm for vendor managed inventory model for a case single-vendor single-retailer with multi-product and multi-constraint

This paper develops a single-vendor single-retailer supply chain for multi-product. The proposed model is based on Vendor Managed Inventory (VMI) approach and vendor uses the retailer's data for better decision making. Number of orders and available capital are the constraints of the model. In this system, shortages are backordered; therefore, the vendor’s warehouse capacity is another limitation of the problem. After the model formulation, an Integer Nonlinear Programming problem will be provided; hence, a genetic algorithm has been used to solve the model. Consequently, order quantities, number of shipments received by a retailer and maximum backorder levels for products have been determined with regard to cost consideration. Finally, a numerical example is presented to describe the sufficiency of the proposed strategy with respect to parameter-tuned by response surface methodology (RSM).</p

A two-storage model for deteriorating items with holding cost under inflation and Genetic Algorithms

A deterministic inventory model has been developed for deteriorating items and Genetic Algorithms (GA) having a ramp type demands with the effects of inflation with two-storage facilities. The owned warehouse (OW) has a fixed capacity of W units; the rented warehouse (RW) has unlimited capacity. Here, we assumed that the inventory holding cost in RW is higher than those in OW. Shortages in inventory are allowed and partially backlogged and Genetic Algorithms (GA) it is assumed that the inventory deteriorates over time at a variable deterioration rate. The effect of inflation has also been considered for various costs associated with the inventory system and Genetic Algorithms (GA). Numerical example is also used to study the behaviour of the model. Cost minimization technique is used to get the expressions for total cost and other parameters