Integrated inventory model for single vendor–single buyer with probabilistic demand

In this paper, we consider single vendor–single buyer integrated inventory model with probabilistic demand and equal delivery lot size. The model contributes to the current literature by relaxing the deterministic demand assumption which has been used for almost all integrated inventory models. The objective is to minimise expected total costs incurred by the vendor and the buyer. We develop effective iterative procedures for finding the optimal solution. Numerical examples are used to illustrate the benefit of integration. A sensitivity analysis is performed to explore the effect of key parameters on delivery lot size, safety factor, production lot size factor and the expected total cost. The results of the numerical examples indicate our integrated model gives a significant cost savings over independent model

Operational planning of supply chains in a production and distribution center with just-in-time delivery

Purpose: A supply chain consists of raw material suppliers, manufacturers and retailers where inventory of raw materials and finished goods are involved, respectively. Therefore, it is important to find optimal solutions, which are beneficial for both supplier, manufacturer and retailer. Design/methodology/approach: This research focuses on a semi-continuous manufacturing facility by assuming that the production of succeeding cycle starts immediately after the production of preceding cycle. In reality, the inventory of a supply chain system may not be completely empty. A number of products may be left over after the deliveries are made. These leftover inventories are added to the next shipment after the production of required amount to make up a complete batch for shipment. Therefore, it is extremely important to search for an optimal strategies for these types production facilities where leftover finished goods inventory remains after the final shipment in a production cycle. Considering these scenarios, an inventory model is developed for an imperfect matching condition where some finished goods remains after the shipments. Findings: Based on the previous observation, this research also considers a single facility that follows JIT delivery and produces multiple products to satisfy customers’ demand. For this problem a rotational cycle model is developed to optimize the facility operations. Both problems are categorized as mixed integer non-linear programming problems which are to be solved to find optimum number of orders, shipments and rotational cycle policy for multiple products. Also, this solution will lead to estimate the optimum production quantity and minimum total system cost. Research limitations: This research considers the supply chain based on manufacturers point of view and it does not consider the transportation cost associated with supply chain. Next study will be focused on issues with joint decision making, information sharing, and transportation decision. Practical implications: This study will help the managers of refinery and paper industries in making their operation smooth by applying optimizing techniques and robust decision making. Originality/value: Based on the literature, no research was found on continuous production system supply chain and its optimization with JIT delivery. This research will definitely provide a direction for such problem to the researchers.Peer Reviewe

An operational policy for a single vendor multi buyer integrated inventory supply chain system considering shipping time

Since its introduction, the concept of integrated inventory supply chain has received a considerable amount of attention. The majority of studies in the last three decades revealed an increase in holding cost as product moves further down the chain or up the chain. A recent study Hoque (2008) considered vendor’s setup cost and inventory holding cost. Some research also considered fixed transportation cost, which is unrealistic. This study focuses on a single-vendor, multi-buyer scenario and presents three models. First, two models illustrate the transferring of equally-sized batches. Then, a third model considers the transferring of unequally-sized batches in a lot. This study relaxes the assumption that vendor’s holding cost must be greater than or less than all buyer’s holding costs in the system. Also, this research facilitates unequal transportation time and cost for different buyers for greater flexibility. The total system cost is calculated by summing the annual operational cost for all the parties in the system. Optimum values of the decision variables are determined using a direct search method. As presented by the third model, a numerical example demonstrates that the total system cost is less when compared with other two models presented. This study also presents the following: solution procedures to solve each model, many numerical examples to support mathematical findings, and performance comparisons among three findings. In order to justify the lot-splitting approach for solving the integrated inventory problem, alternative models with no lot splitting are devised and tested under the same circumstances. Alternative models with no lot splitting produce similar or better results. Under the same circumstances, the alternate third model is observed to be offering the least total cost for the system. This study also presents a sensitivity analysis to check the robustness of the three models. The future extension of this research may involve considering storage capacity constraint and random demand

An investigation of production and transportation policies for multi-item and multi-stage production systems

Die vorliegende kumulative Dissertation besteht aus fünf Artikeln, einem Arbeitspapier und vier Artikeln, die in wissenschaftlichen Zeitschriften veröffentlicht wurden. Alle fünf Artikel beschäftigen sich mit der Losgrößenplanung, jedoch mit unterschiedlichen Schwerpunkten. Artikel 1 bis 4 untersuchen das Economic Lot Scheduling Problem (ELSP), während sich der fünfte Artikel mit einer Variante des Joint Economic Lot Size (JELS) Problems beschäftigt. Die Struktur dieser Dissertation trägt diesen beiden Forschungsrichtungen Rechnung und ordnet die ersten vier Artikel dem Teil A und den fünften Artikel dem Teil B zu

Effect of Unequal Lot Sizes, Variable Setup Cost, and Carbon Emission Cost in a Supply Chain Model

Due to heavy transportation for single-setup multidelivery (SSMD) policy in supply chain management, this model assumes carbon emission cost to obtain a realistic behavior for world environment. The transportation for buyer and vendor is considered along with setup cost reduction by using an investment function. It is assumed that the shipment lot size of each delivery is unequal and variable. The buyer inspects all received products and returns defective items to vendor for reworking process. Because of this policy, end customers will only obtain nondefective items. The analytical optimization is considered to obtain the optimum solution of the model. The main goal of this paper is to reduce the total cost by considering carbon emission during the transportation. A numerical example, graphical representation, and sensitivity analysis are given to illustrate the model

Essays on Shipment Consolidation Scheduling and Decision Making in the Context of Flexible Demand

This dissertation contains three essays related to shipment consolidation scheduling and decision making in the presence of flexible demand. The first essay is presented in Section 1. This essay introduces a new mathematical model for shipment consolidation scheduling for a two-echelon supply chain. The problem addresses shipment coordination and consolidation decisions that are made by a manufacturer who provides inventory replenishments to multiple downstream distribution centers. Unlike previous studies, the consolidation activities in this problem are not restricted to specific policies such as aggregation of shipments at regular times or consolidating when a predetermined quantity has accumulated. Rather, we consider the construction of a detailed shipment consolidation schedule over a planning horizon. We develop a mixed-integer quadratic optimization model to identify the shipment consolidation schedule that minimizes total cost. A genetic algorithm is developed to handle large problem instances. The other two essays explore the concept of flexible demand. In Section 2, we introduce a new variant of the vehicle routing problem (VRP): the vehicle routing problem with flexible repeat visits (VRP-FRV). This problem considers a set of customers at certain locations with certain maximum inter-visit time requirements. However, they are flexible in their visit times. The VRP-FRV has several real-world applications. One scenario is that of caretakers who provide service to elderly people at home. Each caretaker is assigned a number of elderly people to visit one or more times per day. Elderly people differ in their requirements and the minimum frequency at which they need to be visited every day. The VRP-FRV can also be imagined as a police patrol routing problem where the customers are various locations in the city that require frequent observations. Such locations could include known high-crime areas, high-profile residences, and/or safe houses. We develop a math model to minimize the total number of vehicles needed to cover the customer demands and determine the optimal customer visit schedules and vehicle routes. A heuristic method is developed to handle large problem instances. In the third study, presented in Section 3, we consider a single-item cyclic coordinated order fulfillment problem with batch supplies and flexible demands. The system in this study consists of multiple suppliers who each deliver a single item to a central node from which multiple demanders are then replenished. Importantly, demand is flexible and is a control action that the decision maker applies to optimize the system. The objective is to minimize total system cost subject to several operational constraints. The decisions include the timing and sizes of batches delivered by the suppliers to the central node and the timing and amounts by which demanders are replenished. We develop an integer programing model, provide several theoretical insights related to the model, and solve the math model for different problem sizes

The lot sizing problem: A tertiary study

This paper provides a survey of literature reviews in the area of lot sizing. Its intention is to show which streams of research emerged from Harris' seminal lot size model, and which major achievements have been accomplished in the respective areas. We first develop the methodology of this review and then descriptively analyze the sample. Subsequently, a content-related classification scheme for lot sizing models is developed, and the reviews contained in our sample are discussed in light of this classification scheme. Our analysis shows that various extensions of Harris' lot size model were developed over the years, such as lot sizing models that include multi-stage inventory systems, incentives, or productivity issues. The aims of our tertiary study are the following: firstly, it helps primary researchers to position their own work in the literature, to reproduce the development of different types of lot sizing problems, and to find starting points if they intend to work in a new research direction. Secondly, the study identifies several topics that offer opportunities for future secondary research