Extension of EOQ model with emergency orders and explicit energy cost considerations

Title from PDF of title page (University of Missouri--Columbia, viewed on August 27, 2012).The entire thesis text is included in the research.pdf file; the official abstract appears in the short.pdf file; a non-technical public abstract appears in the public.pdf file.Thesis advisor: Dr. Wooseung JangIncludes bibliographical references.M.S. University of Missouri--Columbia 2011."May 2011"Given the rising cost of energy, this research studies the effect of energy cost on logistics decisions by analyzing the effect on inventory ordering policies for production systems with constant production rates but small, underlying possibilities for undesirable circumstances to threaten the production schedules. Rather than fulfilling any emergency demand with a more expensive and energy cost sensitive emergency order, the proposed model extends the classic EOQ model to provide multiple, more cost effective, options to fulfill the emergency demand. Under explicit energy cost considerations, the objective of this model is to determine optimal sizes for scheduled order quantity, safety stock, and inventory cycle length that minimize the expected cost per unit time of a product. In order to investigate the effect of energy cost on inventory decisions as well as investigate the environments in which the proposed inventory model is most costeffective, the proposed inventory model is analyzed and compared to the traditional EOQ model while many of the model parameters are varied. The results of this analysis suggest that the environments most significantly affected by energy cost and most receptive to the proposed inventory model consist of high levels of at least one of the following key parameters: product weight, regular demand, or emergency demand

A Continuous Review Inventory System with Lost Sales and Emergency Orders

We analyze a continuous review lost sales inventory system with two types of orders—regular and emergency. The regular order has a stochastic lead time and is placed with the cheapest acceptable supplier. The emergency order has a deterministic lead time is placed with a local supplier who has a higher price. The emergency order is not always filled since the supplier may not have the ability to provide the order on an emergency basis at all times. This emergency order has a higher cost per item and has a known probability of being filled. The total costs for this system are compared to a system without emergency placement of orders. This paper provides managers with a tool to assess when dual sourcing is cost optimal by comparing the single sourcing and dual sourcing models

Supply chain management of blood products: a literature review.

This paper presents a review of the literature on inventory and supply chain management of blood products. First, we identify different perspectives on approaches to classifying the existing material. Each perspective is presented as a table in which the classification is displayed. The classification choices are exemplified through the citation of key references or by expounding the features of the perspective. The main contribution of this review is to facilitate the tracing of published work in relevant fields of interest, as well as identifying trends and indicating which areas should be subject to future research.OR in health services; Supply chain management; Inventory; Blood products; Literature review;

Patient Risk and Data Standards in Healthcare Supply Chain

Patient safety is one of the most important health care challenges. It is a big concern since 1 in every 10 patients around the world is affected by healthcare errors. The focus of this study is given to preventable adverse events that caused by the errors or system flaw that could have been avoided. In this study, simulation models are developed using Arena to evaluate the impact of GS1 data standards on patient risk in healthcare supply chain. The focus was given to the provider hospital supply chain operations where inventory discrepancy and performance deficiencies in recall, return, and outdate management can directly affect patient safety. Simulation models are developed for various systems and scenarios to compare different performance measures and analyze the impact of GS1. The results indicates that as the validation points are closer to the point of use, the number of recalled or outdated products administered to a patient are still reduced significantly so checking at the bedside or PAR is critical. But validation only at these points may cause some problems such as stock outs; therefore, validating in other locations is also needed

Simultaneous Optimization of Block Replacement and Spare Part Ordering TIME for a Multi Component System with Separate Spare Part Ordering for Block and Failure Replacements

A block replacement schedule can be optimized simultaneously with a spare parts ordering schedule, since all items are replaced at a constant interval. The solution of joint optimization for spare parts ordering time and block replacement gives lower costs compared to separate optimization of ordering time and replacement time. The spare parts for replacement can be classified as stochastic demand for failure replacement and deterministic demand for block replacement. In this paper, we propose a simulation model for a separate spare parts ordering schedule. The solution was compared to the solution for a model with common spare parts for both failure and block replacement. The system has N identical components, each with a Weibull lifetime distribution. The costs of failure and block replacements, and also the costs of ordering, holding and shortage of spare parts are given. The proposed model was shown to perform better than the common order model. Also, compared to the age replacement model, the solution of the proposed model is relatively similar, yet the economies of scale would be an advantage for the block replacement over age replacement

Joint maintenance-inventory optimisation of parallel production systems

We model a joint inspection and spare parts inventory policy for maintaining machines in a parallel system, where simultaneous downtime seriously impacts upon production performance and has a significant financial consequence. This dependency between system components means that analysis of realistic maintenance models is intractable. Therefore we use simulation and a numerical optimisation tool to study the cost-optimality of several policies. Inspection maintenance is modelled using the delay-time concept. Critical spare parts replenishment is considered using several variants of a periodic review policy. In particular, our results indicate that the cost-optimal policy is characterised by equal frequencies of inspection and replenishment, and delivery of spare parts that coincides with maintenance intervention. In general, our model provides a framework for studying the interaction of spare parts ordering with maintenance scheduling. The sensitivity analysis that we present offers insights for the effective management of such parallel systems, not only in a paper-making plant, which motivates our modelling development, but also in other manufacturing contexts

Evaluating alternative estimators for optimal order quantities in the newsvendor model with skewed demand

This paper considers the classical Newsvendor model, also known as the Newsboy problem, with the demand to be fully observed and to follow in successive inventory cycles one of the Exponential, Rayleigh, and Log-Normal distributions. For each distribution, appropriate estimators for the optimal order quantity are considered, and their sampling distributions are derived. Then, through Monte-Carlo simulations, we evaluate the performance of corresponding exact and asymptotic confidence intervals for the true optimal order quantity. The case where normality for demand is erroneously assumed is also investigated. Asymptotic confidence intervals produce higher precision, but to attain equality between their actual and nominal confidence level, samples of at least a certain size should be available. This size depends upon the coefficients of variation, skewness and kurtosis. The paper concludes that having available data on the skewed demand for enough inventory cycles enables (i) to trace non-normality, and (ii) to use the right asymptotic confidence intervals in order the estimates for the optimal order quantity to be valid and precise.Inventory Control; Newsboy Problem; Skewed Demand; Exact and Asymptotic Confidence Intervals; Monte-Carlo Simulations