Transform methodology applied to some inventory problems

Determining the economic lot size has always represented one of the most important issues in production planning. This problem has long attracted the attention of researchers, and several models have been developed to meet requirements at minimum cost. In this paper we explore and discuss the evolution of these models during one hundred years of history, starting from the basic model developed by Harris in 1913, up to today. Following Harris's work, a number of researchers have devised extensions that incorporate additional considerations. The evolution of EOQ theory strongly reflects the development of industrial systems over the past century. Here we outline all the research areas faced in the past by conducting a holistic analysis of 219 selected journal papers and trying to give a comprehensive view of past work on the EOQ problem. Finally, a new research agenda is proposed and discussed.

show abstract

“…(Grubbström 2007). Here we make an attempt to tie together a few of the central contributions from our findings above.…”

Section: Methodological Developments Analysing Cash Flows Related To mentioning

confidence: 99%

A century of evolution from Harris׳s basic lot size model: Survey and research agenda

Andriolo

Battini

Grubbström

et al. 2014

International Journal of Production Economics

Self Cite

172

View full text Add to dashboard Cite

show abstract

“…Grubbström (1980Grubbström ( , 2007 shows how capital costs can be determined for inventories and work-in-process at several stages in more complex systems of production and inventory. See also Gurnani (1983).…”

Section: Introductionmentioning

confidence: 99%

Adapting inventory models for handling various payment structures using net present value equivalence analysis

Beullens

Janssens

2014

International Journal of Production Economics

View full text Add to dashboard Cite

Classic inventory models use average cost functions. It is generally accepted that these models should account for the time value of money. They do so not by considering the timing of cash-flows, but by including opportunity costs. The Net Present Value (NPV) framework has long been used to compare these models with. We formalise NPV Equivalence Analysis (NPVEA) under various payment structures, and apply it to a few classic inventory models. While taking the linear approximation is typically part of the process to find equivalence, the essence is to disregard the parameters of a classic inventory model but instead start from cash-flow structures between firms. It is demonstrated how this leads to different plausible interpretations of, or variations to, classic inventory models, in particular for payment structures that differ from conventional assumptions. We identify situations with negative holding costs, which indicates that more features from the real world must be added into the decision model.We illustrate that in addition to capital costs, firms can enjoy capital rewards. These rewards may not always affect the firm's inventory decisions, but are in general useful for finding the impact of changes to various parameters on the firm's future profits.

show abstract

“…The benefit to the total supply chain could be evaluated through Grubbström's MRP model using the NPV approach. Our analysis is based on MRP theory, as found in the papers of Grubbström (1996Grubbström ( , 2007 and later extended to the global supply chain by Bogataj et al (2011), in which the location is also considered, including regional characteristics, such as the cost of labour. For evaluations of activities in such a supply chain, the Net Present Value (NPV) criterion function is used, as in Bogataj andGrubbström (2012, 2013).…”

Section: The Model For the Evaluation Of The Impact Of The Increasingmentioning

confidence: 99%

The Extended MRP Model for the Evaluation and Financing of Superannuation Schemes in a Supply Chain

Bogataj

Vodopivec

Bogataj

2014

Technological and Economic Development of Economy

View full text Add to dashboard Cite

The retirement age of industrial workers in national pension schemes is being raised. However, many industrial workers are not able to work until they have reached the increased retirement age. This problem is decreasing social security, increasing workers anxiety regarding the future and influencing the quality and timing of production processes. Disruptions and lower quality items produced in one activity cell of a supply chain can have a ripple effect throughout an entire supply chain. To solve this problem, we should put in place supplementary occupational pension schemes, which would compensate firms for the depreciated ability of their elderly workers to work when they have reached the previous retirement age but have not yet reached the new, higher retirement age. This article is introduces a model that is based on extended MRP Theory. The model can be used as a basis for negotiations between employers and employees to keep production at the same level of quality. The trade-off between higher contributions to supplementary occupational pension schemes and lower added values is considered. Contributions enable the early retirement of industrial workers at one or more workplaces in a supply chain, while lower added value is the result of lower quality and the perturbed timing of items that are produced in one or more activity cells of a supply chain: these issues have a ripple effect throughout an entire supply chain. The net present value approach is used

show abstract

Transform methodology applied to some inventory problems

Cited by 39 publications

References 32 publications

A century of evolution from Harris׳s basic lot size model: Survey and research agenda

A century of evolution from Harris׳s basic lot size model: Survey and research agenda

Adapting inventory models for handling various payment structures using net present value equivalence analysis

The Extended MRP Model for the Evaluation and Financing of Superannuation Schemes in a Supply Chain

Contact Info

Product

Resources

About