DISTRIBUTION FREE CONTINUOUS-REVIEW INVENTORY MODEL WITH A SERVICE LEVEL CONSTRAINT USING PIECEWISE LINEAR LEAD TIME CRASHING COST

TitleDISTRIBUTION FREE CONTINUOUS-REVIEW INVENTORY MODEL WITH A SERVICE LEVEL CONSTRAINT USING PIECEWISE LINEAR LEAD TIME CRASHING COST
Publication TypeJournal Article
Year of Publication2018
AuthorsVIJAYASHREE, M, UTHAYAKUMAR, R
Volume22
Issue2
Start Page245
Pagination26
Date Published2018
ISSN1083-2564
AMS90B05, 90C25, 90C30
Abstract

In this paper, we have framed a continuous-review model (Q, R, L) inventory model with service level constraint. Lead time is becoming more and more vital for industry, in particular for style supply chains, which has appealed more and more researchers and businessmen’s notice. The length of lead time represents speed and service level. In this paper, lead time is controllable and the compressing cost of lead time follows piecewise linear function. The main contribution of this proposed model is to find minimizing the total cost. A mathematical model is developed to obtain an improved result. An efficient iterative algorithm is designed to obtain the optimal solution of the order quantity, safety stock and lead time. Furthermore, numerical examples are used to demonstrate the benefits of the model by using Matlab 2008 sofware. Sensitivity analysis of the optimal solution with respect to major parameters is carried out and managerial implications are also incorporated. Graphical representation is presented to show the convexity of the total cost.
URLhttps://acadsol.eu/en/articles/22/2/7.pdf
DOI10.12732/caa.v22i2.7
Refereed DesignationRefereed
Full Text

REFERENCES

[1] Ben-Daya, M. and Raouf, A. (1994). Inventory models involving lead time as decision variable. Journal of the Operational Research Society, Vol. 45, pp. 579-582.

[2] Chu, P., Yang, K.L. and Chen, P.S. (2005). Improved inventory models with service level and lead time. Computers & Operations Research, Vol. 32, pp. 285-296.

[3] Gallego, G. and Moon I. (1993). The distribution free newsboy problem: review and extensions. Journal of Operational Research Society, Vol. 44, pp.825-834.

[4] Glock, H.C. (2010). Lead time reduction strategies in a single-vendor single-buyer integrated inventory model with lot size dependent lead time and stochastic demand. International Journal of Production Economics, Vol.136, pp. 37-44.

[5] Hadley, G. and Whitin, T. M. (1963). Analysis of inventory systems. Englewood Cliffs, New Jersey: Prentice-Hall Inc.

[6] Hariga, M. and Ben-Daya, M. (1999). Some stochastic inventory models with deterministic variable lead time. European Journal of Operational Research, Vol. 113, pp. 42-51.

[7] Ho, C.H. (2009). A minimax distribution free procedure for an integrated inventory model with defective goods and stochastic lead time demand. International Journal of Information and Management Sciences, Vol. 20, pp. 161-171.

[8] Hsu, S.L. and Lee, C.C. (2009). Replenishment and lead time decisions in manufacturer retailer chains. Transportation Research Part E, Vol. 45, pp. 398-408.

[9] Liao, C.J. and Shyu, C.H. (1991). An analytical determination of lead time with normal demand. International Journal of Operations & Production Management, Vol. 11, pp. 72- 78. 268 M. VIJAYASHREE AND R. UTHAYAKUMAR

[10] Lee, W.C., Wu, J.W. and Hsu, J.W. (2006). Computational algorithm for inventory model with a service level constraint, lead time demand with the mixture of distribution and controllable negative exponential backorder rate. Applied Mathematics and Computation, Vol. 175, pp. 1125-1138.

[11] Monden, Y. (1966). Toyota Production System (Institute of Industrial Engineers Norcross, Georgia, 1983). E. Naddor: Inventory System (John Wiley, New York).

[12] Moon, I. and Choi, S. (1994). The distribution free continuous review inventory system with a service level constraint. Computers & Industrial Engineering, Vol. 27, pp. 209-212.

[13] Moon I, Gallego G. (1994). Distribution free procedures for some inventory models. Journal of the Operational Research Society, Vol. 45, pp. 651-658.

[14] Moon, I. and Choi, S. (1998). A note on lead time and distributional assumptions in continuous review inventory models. Computers and Operations Research, Vol. 25, pp. 1007-1012.

[15] Naddor, E. (1996). Inventory System (John Wiley, New York).

[16] Nahmias, S. (2005). Production and operations analysis (5th edition.). New York: McGraw- Hill/Irwin.

[17] Ouyang, L.Y, Wu, K.S and Ho, C.H (2007). An integrated vendor-buyer inventory model with quality improvement and lea time reduction. International Journal of Production Economics, Vol. 108, pp. 349-358.

[18] Ouyang L.Y., Yeh, N.C. and Wu, K.S. (1996). Mixture inventory model with backorders and lost sales for variable lead time. Journal of the Operational Research Society, Vol. 47, pp. 829-832.

[19] Ouyang, L.Y. and Wu, K.S. (1997). A rninimax distribution free procedure for mixture inventory model involving variable lead time. Computers and Operations Research, Vol. 24, pp. 875- 882. FREE CONTINUOUS-REVIEW INVENTORY MODEL 269

[20] Ouyang, L.Y., Wu, K.S and Ho, C.H (2004). Integrated vendor-buyer cooperative models with stochastic demand in controllable lead time. International Journal of Production Economics, Vol. 92, pp. 255-266.

[21] Pan, J.C.H., Lo, M.C. and Hsiao, Y.C (2004). Optimal reorder point inventory models with variable lead time and backorder discount considerations. European Journal of Operational Research, Vol. 158, pp. 488-505.

[22] Pan, J.C.H. and Yang, J.S. (2002). A study of an integrated inventory with controllable lead time. International Journal of Production Research, Vol. 40, pp.1263-1273.

[23] Scraf, H. (1958). A min max solution of an inventory problem. In studies in the mathematical Theory of Inventory and Production CA: Standard University Press, pp. 201-209. [24] Silver, E.A. and Peterson, R. (1985). Decision Systems for Inventory Management and Production Planning (John Wiley, New York).

[25] Silver, E. A., Pyke, D. F. and Peterson, R. (1998). Inventory management and production planning and scheduling (3rd edition). New York: John Wiley & Sons.

[26] Tajbakhsh, M.M. (2010). On the distribution free continuous-review inventory model with a service level constraint. Computers & Industrial Engineering, Vol. 59, pp.1022-1024.

[27] Tersine, R.J. (1994). Principles of Inventory and Materials Management, North-Holland, New York.