Inventory models with lateral transshipments : a review

Lateral transshipments within an inventory system are stock movements between locations of the same echelon. These transshipments can be conducted periodically at predetermined points in time to proactively redistribute stock, or they can be used reactively as a method of meeting demand which cannot be satised from stock on hand. The elements of an inventory system considered, e.g. size, cost structures and service level denition, all in uence the best method of transshipping. Models of many dierent systems have been considered. This paper provides a literature review which categorizes the research to date on lateral transshipments, so that these dierences can be understood and gaps within the literature can be identied

Supply chain collaboration

In the past, research in operations management focused on single-firm analysis. Its goal was to provide managers in practice with suitable tools to improve the performance of their firm by calculating optimal inventory quantities, among others. Nowadays, business decisions are dominated by the globalization of markets and increased competition among firms. Further, more and more products reach the customer through supply chains that are composed of independent firms. Following these trends, research in operations management has shifted its focus from single-firm analysis to multi-firm analysis, in particular to improving the efficiency and performance of supply chains under decentralized control. The main characteristics of such chains are that the firms in the chain are independent actors who try to optimize their individual objectives, and that the decisions taken by a firm do also affect the performance of the other parties in the supply chain. These interactions among firms’ decisions ask for alignment and coordination of actions. Therefore, game theory, the study of situations of cooperation or conflict among heterogenous actors, is very well suited to deal with these interactions. This has been recognized by researchers in the field, since there are an ever increasing number of papers that applies tools, methods and models from game theory to supply chain problems

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

Multilocation Inventory Systems With Centralized Information.

The management of multi-echelon inventory systems has been both an important and challenging research area for many years. The rapid advance in information technology and the emphasis on integrated supply chain management have new implications for the successful operation of distribution systems. This research focuses on the study of some fundamental issues related to the operation of a multilocation inventory system with centralized information. First, we do a comparative analysis to evaluate the overall performance of individual versus centralized ordering policies for a multi-store distribution system where centralized information is available. This study integrates the existing research and clarifies one of the fundamental questions facing inventory managers today: whether or not ordering decisions should be centralized. Next, we consider a multi-store distribution system where emergency transshipments are permitted among these stores. Based on some simplifying assumptions, we develop an integrated model with a joint consideration of inventory and transshipment components. An approximately optimal (s, S) policy is obtained through a dynamic programming technique. This ordering policy is then compared with a simplified policy that assumes free and instantaneous transshipments. We also examine the relative performance of base stock policies for a centralized-ordering distribution system. Numerical studies are provided to give general guidelines for use of the policies

Developing Inventory Policy for Aircraft Spare Parts using Periodic Review Model

This research is conducted to develop inventory policy of aircraft consumable spare parts which are needed on aircraft maintenance activity. In this research, we used periodic review model to determine the optimal policy of aircraft spare parts inventory. By using the periodic review model, we find optimal period of inventory review and maximum level of inventory.  The optimal decision is determined based on the minimum total cost. We have classified consumable spare parts using ABC method to categorize them based on their dollar contribution and demand frequency. Therefore in this research, we focus on managing the inventory level for spare parts on class C. The result from this study shows that the proposed periodic review policy result in lower total inventory cost compared the the company policy. The proposed policy gives an average saving 35.38 %. Keywords: Inventory, spare part, periodic review, inventory review, maximum level, ABC method

Framework for Evaluation of Strategies for Pooling of Repairable Spare Parts

Background: The ability to quickly provide parts for the supply of advanced technical systems in equipment-intensive industries (such as airlines and nuclear power plants) is critical to the systems overall performance. In order to maintain a targeted system availability large quantities of spare parts are often required which in turn results in excessive inventory costs. Seeing as inventory systems often account for a large proportion of a business‟ costs a tough issue faced by companies in these industries is how to reduce the total inventory cost without having a negative impact on the system availability. An approach that may successfully deal with such a problem is pooling. Pooling refers to an arrangement in which multiple owners of the same type of technical systems cooperate by sharing their inventories. Purpose: The theoretical purpose of the thesis is to emphasize different pooling strategies and to identify and assess the characteristics of the strategies. The practical purpose of the thesis is to develop a robust method that facilitates a fair comparison of considered strategies. The objective is thus to develop a generic model that evaluates soft values (here, referred to as soft aspects) for each strategy, and also, to put the soft aspects in relation to the annual cost of a strategy in a final model. iv Methodology: The initial phase of the thesis was dedicated to a desk study review of current literature within the field of study. Recently published scientific articles, papers authored by consultants at Systecon, and literature used in courses at the Faculty of Engineering at Lund University lay the basis for the theoretical framework. The framework developed is derived from discussions with the supervisors in connection with interviews carried out with; relevant Systecon customers and company representatives at two trade fairs, Offshore Wind 2009 and Nordic Rail 2009. Conclusion: This thesis presents a framework for evaluation of strategies (stand alone, ad hoc cooperation, cooperative pooling, and commercial pooling) for pooling of repairable spare parts. Characteristics of all strategies are emphasized and assessed. From the characteristics, which are provided in Table 5.3, a model to evaluate soft values of each strategy is derived. The model, named evaluation of soft values, is provided in Table 5.4 and Table 5.5. Also, a methodical approach to derive a final strategy is provided in section 5.7. To make sure that a decision-maker is well aware of how the model should be applied, a fictitious case study is build up in where every step of the decision making process is thoroughly described. Furthermore, in the case study a final model that facilitates the derivation of a best strategy is presented. By means of a specified weighting coefficient and properly chosen set of scales, the final model provides with a final strategy. The outcome of the final model is based on the outcomes of the cost models and the outcomes of the evaluation of soft values model