A periodic review inventory model with stock dependent demand, permissible delay in payment and price discount on backorders

In this paper we study a periodic review inventory model with stock dependent demand. When stock on hand is zero, the inventory manager offers a price discount to customers who are willing to backorder their demand. Permissible delay in payments allowed to the inventory manager is also taken into account. Numerical examples are cited to illustrate the model

Spare parts planning and control for maintenance operations

This paper presents a framework for planning and control of the spare parts supply chain inorganizations that use and maintain high-value capital assets. Decisions in the framework aredecomposed hierarchically and interfaces are described. We provide relevant literature to aiddecision making and identify open research topics. The framework can be used to increasethe e¿ciency, consistency and sustainability of decisions on how to plan and control a spareparts supply chain. This point is illustrated by applying it in a case-study. Applicability of theframework in di¿erent environments is also investigated

Optimization of a perishable inventory system: A simulation study in a Ho.Re.Ca. company

The main goal of this paper is to describe the optimization of the inventory management process in a real context of perishable food products. The study involves one of the largest Italian HO.RE.CA. companies, located in the north of Italy and operating as a provider of the catering, commercial and welfare services. A simulation model was set up with the purpose of adapting three traditional reordering policies (i.e. Re-Order Point, Re-Order Cycle, and (s,S)) to a set of products belonging to company's assortment and evaluating the resulting economic outcomes. To this end, each policy was modelled on Microsoft ExcelTM, so as to compute the total cost of inventory management and determine of the minimum cost strategy. A comparison with the current company's performance and that achievable with the optimized policy is also proposed

Inventory Policies for Deteriorating Items with Maximum Lifetime under Downstream Partial Trade Credits to Credit-Risk Customers by Discounted Cash Flow Analysis

Getting loans from banks are almost impossible after 2008 global financial crisis. As a result, about 80% of companies in the United Kingdom and the United States offer their products on various short terms, free-interest loans to customers. To compute the interest earned and charged during the credit period but not to the revenue and other costs which are considerably larger than the interest earned and charged, numerous researchers and academicians apply merely the discounted cash flow (DCF) analysis. In addition, some products deteriorate continuously and cannot sell after expiration date. However, a little number of researchers have considered the product lifetime expectance into their models. In this chapter, a supplier-retailer-customer chain model is developed. The supplier provides an upstream full trade credit to the retailer, and the credit-risk customer gets a downstream partial trade credit from the retailer. The non-decreasing deterioration rate is 100% near particularly close to its expiration date. To compute all relevant costs, DCF analysis is applied. The retailer’s optimal replenishment cycle time is not only exists but also unique that demonstrated in this proposal and that has been shown by the numerical examples

Modelling and Determining Inventory Decisions for Improved Sustainability in Perishable Food Supply Chains

Since the introduction of sustainable development, industries have witnessed significant sustainability challenges. Literature shows that the food industry is concerned about its need for efficient and effective management practices in dealing with perishability and the requirements for conditioned storage and transport of food products that effect the environment. Hence, the environmental part of sustainability demonstrates its significance in this industrial sector. Despite this, there has been little research into environmentally sustainable inventory management of deteriorating items. This thesis presents mathematical modelling based research for production inventory systems in perishable food supply chains. In this study, multi-objective mixed-integer linear programming models are developed to determine economically and environmentally optimal production and inventory decisions for a two-echelon supply chain. The supply chain consists of single sourcing suppliers for raw materials and a producer who operates under a make-to-stock or make-to-order strategy. The demand facing the producer is non-stationary stochastic in nature and has requirements in terms of service level and the remaining shelf life of the marketed products. Using data from the literature, numerical examples are given in order to test and analyse these models. The computational experiments show that operational adjustments in cases where emission and cost parameters were not strongly correlated with supply chain collaboration (where suppliers and a producer operate under centralised control), emissions are effectively reduced without a significant increase in cost. The findings show that assigning a high disposal cost, limit or high weight of importance to perished goods leads to appropriate reduction of expected waste in the supply chain with no major cost increase. The research has made contributions to the literature on sustainable production and inventory management; providing formal models that can be used as an aid to understanding and as a tool for planning and improving sustainable production and inventory control in supply chains involving deteriorating items, in particular with perishable food supply chains.the Ministry of Science and Technology, the Royal Thai Government

CONCURRENT MULTI-PART MULTI-EVENT DESIGN REFRESH PLANNING MODELS INCORPORATING SOLUTION REQUIREMENTS AND PART-UNIQUE TEMPORAL CONSTRAINTS

Technology obsolescence, also known as DMSMS (Diminishing Manufacturing Sources and Material Shortages), is a significant problem for systems whose operational life is much longer than the procurement lifetimes of their constitute components. The most severely affected systems are sustainment-dominated, which means their long-term sustainment (life-cycle) costs significantly exceed the procurement cost for the system. Unlike high-volume commercial products, these sustainment-dominated systems may require design refreshes to simply remain manufacturable and supportable. A strategic method for reducing the life-cycle cost impact of DMSMS is called refresh planning. The goal of refresh planning is to determine when design refreshes should occur (or what the frequency of refreshes should be) and how to manage the system components that are obsolete or soon to be obsolete at the design refreshes. Existing strategic management approaches focus on methods for determining design refresh dates. While creating a set of feasible design refresh plans is achievable using existing design refresh planning methodologies, the generated refresh plans may not satisfy the needs of the designers (sustainers and customers) because they do not conform to the constraints imposed on the system. This dissertation develops a new refresh planning model that satisfies refresh structure requirements (i.e., requirements that constrain the form of the refresh plan to be periodic) and develops and presents the definition, generalization, synthesis and application of part-unique temporal constraints in the design refresh planning process for systems impacted by DMSMS-type obsolescence. Periodic refresh plans are required by applications that are refresh deployment constrained such as ships and submarines (e.g., only a finite number of dry docks are available to refresh systems). The new refresh planning model developed in this dissertation requires 50% less data and runs 50% faster than the existing state-of-the-art discrete event simulation solutions for problems where a periodic refresh solution is required

Grocery omnichannel perishable inventories: performance measures and influencing factors

Purpose- Perishable inventory management for the grocery sector has become more challenging with extended omnichannel activities and emerging consumer expectations. This paper aims to identify and formalize key performance measures of omnichannel perishable inventory management (OCPI) and explore the influence of operational and market-related factors on these measures. Design/methodology/approach- The inductive approach of this research synthesizes three performance measures (product waste, lost sales and freshness) and four influencing factors (channel effect, demand variability, product perishability and shelf life visibility) for OCPI, through industry investigation, expert interviews and a systematic literature review. Treating OCPI as a complex adaptive system and considering its transaction costs, this paper formalizes the OCPI performance measures and their influencing factors in two statements and four propositions, which are then tested through numerical analysis with simulation. Findings- Product waste, lost sales and freshness are identified as distinctive OCPI performance measures, which are influenced by product perishability, shelf life visibility, demand variability and channel effects. The OCPI sensitivity to those influencing factors is diverse, whereas those factors are found to moderate each other's effects. Practical implications- To manage perishables more effectively, with less waste and lost sales for the business and fresher products for the consumer, omnichannel firms need to consider store and online channel requirements and strive to reduce demand variability, extend product shelf life and facilitate item-level shelf life visibility. While flexible logistics capacity and dynamic pricing can mitigate demand variability, the product shelf life extension needs modifications in product design, production, or storage conditions. OCPI executives can also increase the product shelf life visibility through advanced stock monitoring/tracking technologies (e.g. smart tags or more comprehensive barcodes), particularly for the online channel which demands fresher products. Originality/value- This paper provides a novel theoretical view on perishables in omnichannel systems. It specifies the OCPI performance, beyond typical inventory policies for cost minimization, while discussing its sensitivity to operations and market factors

An Inventory and Safety Stock Analysis of Air Force Medical Service Pharmaceuticals

A significant challenge facing the Air Force Medical Service (AFMS) Military Treatment Facilities (MTFs) is the perishability costs associated with its pharmaceutical stock. During a two year time period, the AFMS returned expired or nearly expired pharmaceuticals valued at over $23,000,000. In response to the waste represented by pharmaceutical perishability cost, this thesis analyzes the historical inventory management decisions of 173 MTF/pharmaceutical combinations and proposes an alternative inventory control policy to reduce perishability costs. Based on the critical nature of pharmaceuticals and importance of generating high patient satisfaction, the proposed alternative inventory control system was required to be cognizant of the cost savings/service level trade-off. After applying a fundamental inventory management equation to historical patient demands, the calculated inventory control policy is evaluated against a recent nine month time period of patient demand in terms of potential cost savings and fill rates. At the conclusion of the study, it is determined that the use of the proposed inventory control policy would generate an effective perishability cost savings of approximately$250,000 annually, as well as a one-time inventory reduction cost savings that exceeds $1,700,000. In spite of this stock reduction, the studied MTF/pharmaceutical combinations would maintain a strong fill rate that exceeds 99.82%