Perishable Items in Multi-Level Inventory Systems

This master thesis studies a two-echelon distribution system for perishable items with two non identical retailers. Each location is managed following a standard continuous (R, Q) ordering policy. The demand occurs solely at the retailers and follows independent Poisson processes. Customers are backordered when the retailer is out of stock. The items are considered as fixed lifetime perishables. Whenever an item perished, it is discarded from the stock. The model includes fix transportation time and the allocation policy at the central warehouse is a First-Come-First-Serve one. This kind of system is very complicated and therefore hard to study. In this master thesis, we focus on a simulation study of 48 different problems with both a FIFO and a LIFO issuing policy at the retailers. The goal of this study is therefore to optimize the values of R in (R, Q) ordering policies considering that the items are perishables. To do so, we try to optimize the values of the reorder points at every location. We also try to find some general behaviour of the system and we compare the FIFO and the LIFO best found solution. More than 1000 hours of computer-time were used for this study. For every problem, we conducted an optimization process to find better values of the reorder points at every location. For the FIFO case, an average cost reduction of more than 20% was found. It exists a good opportunity in term of cost savings while taking into account the perishable characteristic of the items. Another finding of our study is that the LIFO case has good performance comparing to what expected. On average, the costs increase is only 7% while considering a LIFO issuing policy instead of a FIFO one. Moreover, the values of the reorder points for the FIFO best found solution are still the same than the LIFO best found solution in 70% of the problems studied

Perishable Inventory Problem as a Stochastıc Model: A Literature Review

Envanter yönetimi, müşteri talebinin en düşük maliyetlerle zamanında karşılanmasını sağlar. Bu nedenle envanter yönetiminin doğru yapılması, işletmelere rekabet ortamında üstünlük sağlayacağı gibi, maliyetlerini de azaltacaktır. Envanter kuramı literatüründeki klasik modellerin çoğu, ürünlerin süre kısıtlaması olmadan stoklanabileceğinden hareketle geliştirilmiştir. Oysa sağlık, gıda gibi birçok alanda karşılaştığımız raf ömrü olan ürünlerin envanter kontrolü, dayanıklı ürünlerin envanter kontrolünden farklıdır ve önemli bir problemdir. Bu çalışmada bozulabilir envanter probleminin genel yapısı ve dinamikleri kısaca açıklanmış, problemin hangi yönleri ile farklılık göstereceği incelenmiştir. Ayrıca bozulabilir envanter probleminin çözümüne önemli katkılar yapmış olan çalışmalar araştırılmış, uygun bir sınıflamaya göre bu çalışmalar kısaca sunulmuştur Inventory management allows satisfying customer demand on time with minimum cost. Hence, accurate management of inventory not only allows for superiority to companies in the competitive environment but also minimize the inventory costs, as well. Most of the classical models in inventory theory literature are developed for the products that can be stored without time limitation. However, the inventory management of some products which have a lifetime such as the products that are used in health or food industry is different from the classical models and has been an important problem recently. In this study, the general structure and dynamics of the perishable inventory have been explained briefly and the aspects that differs the perishable problem from each other have been examined. Moreover, the literature those make considerable contributions on the inventory management of perishable products have been studied and presented briefly with respect to the appropriate classificatio

Exact and Approximate Analysis of Multi-Echelon, Multi-Indenture Spare Parts Systems with Commonality

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Analysis of the (s, S) policy for perishables with a random shelf life

A continuous review perishable inventory system operating under the (s,S) policy is considered. Assuming a random shelf life with a general distribution, renewal arrivals and a negligible replenishment lead time, exact expressions for the expected cost rate function for unit and batch demands are derived. For unit demands, it is shown that the average cost rate function is quasi-convex in (s,S). Numerical findings indicate that the loss incurred by ignoring the randomness of the shelf life can be drastic. It is observed that the shape of the shelf life distribution has a significant impact on the costs and a precise estimation of shelf life distribution may result in substantial savings. Based on the presented analytical results, a new heuristic for positive lead times is proposed. Extensive numerical studies show that the proposed heuristic performs better than an existing one suggested for fixed shelf lives in most of the cases studied

Performance measures of nonstationary inventory models for perishable products under the EWA policy

Accurately estimating key performance indicators in inventory models for perishable items is essential in order to assess and improve the management strategy of these systems. We analyse the production of platelet concentrates at blood banks under the EWA replenishment policy. We give analytical approximations of the most important performance measures, such as the size of orders, the size of stocks, the percentage of outdating, the age distribution of stocks and the freshness of units issued, among others. The production of platelet concentrates is a prototypical example of inventory models for short life items with random demand and a weekly pattern, where a high service level is required. The methodology and the approximations presented here can be easily adapted to other inventory systems with similar characteristics. Most of the formulae in this article are new for nonstationary models under the EWA policy; indeed, formulae for the age distribution of units in stock and of units issued have not appeared in the literature even for the simpler base-stock replenishment policy. We apply our results to a real blood bank and find very close agreement between the formulae and the results of Monte Carlo simulations. The accuracy of our approximations is also tested in several scenarios, depending on the lifetime of units, safety stock levels and the probabilistic distribution of demand.PID2020-116873GB-I0

A time-based control policy for a perishable inventory system with lost sales

Ankara : Department of Industrial Engineering and the Institute of Engineering and Science of Bilkent Univ., 1998.Thesis (Master's) -- Bilkent University, 1998.Includes bibliographical references leaves 49-52In this study, we propose a new time-based poiicy for continuous review inventory systems where the products have fixed fife times and unmet denicinds are iost. We cierive the exact expressions of the key operating characteristics of the rnociei. Based on these performance measures, we optimize the reievant costs subject to a service ievei criterion, nameiy the average fraction of time out of stock. A numericai analysis is provided to Vcilidate and compare our model with conventional policies. We also investigate some special cases of the time-based policy which are applicable to the products with infinite life times.Tekin, EylemM.S

Theory and Practice of Supply Chain Synchronization

In this dissertation, we develop strategies to synchronize component procurement in assemble-to-order (ATO) production and overhaul operations. We focus on the high-tech and mass customization industries which are not only considered to be very important to create or keep U.S. manufacturing jobs, but also suffer most from component inventory burden. In the second chapter, we address the deterministic joint replenishment inventory problem with batch size constraints (JRPB). We characterize system regeneration points, derive a closed-form expression of the average product inventory, and formulate the problem of finding the optimal joint reorder interval to minimize inventory and ordering costs per unit of time. Thereafter, we discuss exact solution approaches and the case of variable reorder intervals. Computational examples demonstrate the power of our methodology. In the third chapter, we incorporate stochastic demand to the JRPB. We propose a joint part replenishment policy that balances inventory and ordering costs while providing a desired service level. A case study and guided computational experiments show the magnitudes of savings that are possible using our methodology. In the fourth chapter, we show how lack of synchronization in assembly systems with long and highly variable component supply lead times can rapidly deteriorate system performance. We develop a full synchronization strategy through time buffering of component orders, which not only guarantees meeting planned production dates but also drastically reduces inventory holding costs. A case study has been carried out to prove the practical relevance, assess potential risks, and evaluate phased implementation policies. The fifth chapter explores the use of condition information from a large number of distributed working units in the field to improve the management of the inventory of spare parts required to maintain those units. Synchronization is again paramount here since spare part inventory needs to adapt to the condition of the engine fleet. All needed parts must be available to complete the overhaul of a unit. We develop a complex simulation environment to assess the performance of different inventory policies and the value of health monitoring. The sixth chapter concludes this dissertation and outlines future research plans as well as opportunities