Safety stock optimisation in two-echelon assembly systems: normal approximation models

Desmet, Bram; Aghezzaf, El‐Houssaine; Vanmaele, Hendrik

doi:10.1080/00207540903164636

Cited by 10 publications

(5 citation statements)

References 30 publications

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“…In a periodic review capacitated multi-echelon assembly system, Woerner et al (2017) proposed an approximate method to resolve the joint optimization problem of safety stock and capacity allocation. Desmet et al (2010) proposed an approximation model to calculate optimal safety stock in a two-echelon assembly system. There exists also some papers that studied the use of rush orders as an alternative supply mode and evaluated its impact on inventory control problems.…”

Section: Studied a Multiplementioning

confidence: 99%

The use of rush deliveries in periodic review assemble-to-order systems

Benbitour

Şahin

Dallery

2018

International Journal of Production Research

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We calculate optimal safety stock in a periodic review (T,S) Assemble-to-Order system having multiple components and multiple finished goods. Customer orders for finished goods arrive according to independent Poisson processes, and cannot be neither backlogged nor lost. In case of potential component stock-out, the studied system uses rush deliveries from suppliers. For this setting, approximate expressions of the optimal safety stock that minimize the sum of inventory holding and rush ordering costs are developed. Exact optimal safety stocks are calculated using discrete event simulation, and compared numerically to the approximate expressions. The model is applied to a first-tier automotive supplier and yields to a significant reduction in terms of inventory holding and rush ordering costs. A sensitivity analysis on relevant system parameters such as components demand, assembly coefficients and unit rush ordering cost is conducted.

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Section: Studied a Multiplementioning

confidence: 99%

The use of rush deliveries in periodic review assemble-to-order systems

Benbitour

Şahin

Dallery

2018

International Journal of Production Research

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“…We consider Eq. as the basic model, because it is developed and implemented by other researchers , and any other model will be compared with this first one on the basis of their effects on the indicators defined in Section 4.2.…”

Section: A Safety Stock‐based Deterministic Equivalent Approximate Momentioning

confidence: 99%

Managing inventory and service levels in a safety stock‐based inventory routing system with stochastic retailer demands

Yadollahi

Aghezzaf

Raa

2017

Appl Stoch Models Bus & Ind

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The inherent uncertainty in supply chain systems compels managers to be more perceptive to the stochastic nature of the systems' major parameters, such as suppliers' reliability, retailers' demands, and facility production capacities. To deal with the uncertainty inherent to the parameters of the stochastic supply chain optimization problems and to determine optimal or close to optimal policies, many approximate deterministic equivalent models are proposed. In this paper, we consider the stochastic periodic inventory routing problem modeled as chance-constrained optimization problem. We then propose a safety stock-based deterministic optimization model to determine near-optimal solutions to this chance-constrained optimization problem. We investigate the issue of adequately setting safety stocks at the supplier's warehouse and at the retailers so that the promised service levels to the retailers are guaranteed, while distribution costs as well as inventory throughout the system are optimized. The proposed deterministic models strive to optimize the safety stock levels in line with the planned service levels at the retailers. Different safety stock models are investigated and analyzed, and the results are illustrated on two comprehensively worked out cases. We conclude this analysis with some insights on how safety stocks are to be determined, allocated, and coordinated in stochastic periodic inventory routing problem. Copyright

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“…The major question asked by researchers is identifying component stockouts and combining possible stock-outs of the items in the assembly (Desmet et al, 2010). Axsäter (2015) stated that early in the material flow, holding costs in production are usually minimal.…”

Section: Safety Stock Allocation Policiesmentioning

confidence: 99%

“…Multi-echelon inventory models for the case of assembly systems have been the focus of many researchers in the last decade. The challenge of optimizing safety stocks in a two-echelon assembly system was addressed in (Desmet et al, 2010). It introduces and examines several approximation models for assembly lead times based on the assumptions of normal assembly demand and normal nominal lead times for components.…”

Section: Literature Reviewmentioning

confidence: 99%

“…If it is the case, with the support of an information system to control inventory status at different facilities, the implementation of an MRP system could be the best choice for the decision-maker (Axsäter, 2015). If it is not the case, it would be convenient to adopt the decomposition technique demonstrated first by the work of Clark and Scarf (1960) extended by the literature in other research papers (Desmet et al, 2010;Moncayo-Martínez and Zhang, 2013). We followed the process illustrated in Figure 2 to build the options listed in Table 3.…”

Section: • Determining Decision Nodesmentioning

confidence: 99%

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A literature Review on Multi-echelon Inventory Management Policies: Case of Assembly Systems

Proceedings of the International Conference on Industrial Engineering and Operations Management

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Inventory control presents a major issue in supply chain management. Many businesses understand the importance of an effective inventory management system. When dealing with demand fluctuations, proper inventory management assists in providing a high level of customer service. The necessity for an integrated approach to inventory management had become vital especially in the current complex supply chain networks where inventories are located throughout the system as raw materials or finished goods. Multi-echelon inventory management allows considering various challenges and issues related to the interdependencies between different stages of the supply chain. Stocks of raw materials, components, and finished goods are all interrelated in production. Multiple multi-echelon inventory models for production systems were developed by researchers to solve issues related to either the supply chain efficiency or responsiveness. In this paper, we provide a literature review on multi-echelon inventory management policies for the assembly structure. Different alternatives for managing multi-echelon inventory systems for the case of assembly systems are generated.

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Safety stock optimisation in two-echelon assembly systems: normal approximation models

Cited by 10 publications

References 30 publications

The use of rush deliveries in periodic review assemble-to-order systems

The use of rush deliveries in periodic review assemble-to-order systems

Managing inventory and service levels in a safety stock‐based inventory routing system with stochastic retailer demands

A literature Review on Multi-echelon Inventory Management Policies: Case of Assembly Systems

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