Optimal ordering policy in simple inventory models with modularization and postponement

Tze Ming Chen, Tai-Yue Wang, Jui Ming Hu

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Modularization and postponement are the two issues regarding product and process redesign required for adaptation of enterprises to the trends of globalization, customization, quick response and rapid technology changes. Past studies have explored these issues in abstracts or through practical discussion of specific cases. This study discusses the effects of these two issues on inventory control. A cost, hereafter called the service cost, is used to reduce the risk of underestimating the variable costs. Specifically, a simple multi-item inventory system (a vanilla box and optional components) with periodic review is proposed, and solution procedures are developed for the models. Depending on the characteristics of the proposed models, some heuristic methods are suggested. The results reveal that (1) the time required for the generic production process plays an important role, and thus, outsourcing, reprocessing, and the vanilla box redesign are suitable and considerable policies to reduce the time of generic production process. (2) The larger aggregate service level enables the demands of the end-product with the smaller end-item demand to be completely fulfilled. (3) The proposed models provide a reference for a multilevel inventory model for component commonality in an inventory/production system.

Original languageEnglish
Title of host publication40th International Conference on Computers and Industrial Engineering
Subtitle of host publicationSoft Computing Techniques for Advanced Manufacturing and Service Systems, CIE40 2010
DOIs
Publication statusPublished - 2010 Dec 1
Event40th International Conference on Computers and Industrial Engineering, CIE40 2010 - Awaji, Japan
Duration: 2010 Jul 252010 Jul 28

Publication series

Name40th International Conference on Computers and Industrial Engineering: Soft Computing Techniques for Advanced Manufacturing and Service Systems, CIE40 2010

Other

Other40th International Conference on Computers and Industrial Engineering, CIE40 2010
CountryJapan
CityAwaji
Period10-07-2510-07-28

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All Science Journal Classification (ASJC) codes

  • Computational Theory and Mathematics
  • Software

Cite this

Chen, T. M., Wang, T-Y., & Hu, J. M. (2010). Optimal ordering policy in simple inventory models with modularization and postponement. In 40th International Conference on Computers and Industrial Engineering: Soft Computing Techniques for Advanced Manufacturing and Service Systems, CIE40 2010 [5668382] (40th International Conference on Computers and Industrial Engineering: Soft Computing Techniques for Advanced Manufacturing and Service Systems, CIE40 2010). https://doi.org/10.1109/ICCIE.2010.5668382