Batch ordering inventory management under the mixed demand information: a case study

Alim, Muzaffer and Beullens, Patrick (2020) Batch ordering inventory management under the mixed demand information: a case study. Konya Journal of Engineering Sciences, 8 (3), 666-677. (doi:10.36306/konjes.599332).

Abstract

This study is concerned with analysing the past demand data and development of an inventory model with demand arising from deterministic which is known in advance and random sources simultaneously. Two different shortages are created for each demand type and in order to prevent model to backlog the deterministic demand, very high shortage cost is given for deterministic demand. The numerical value of the parameters are obtained from a real case which the inventory system of an information and technological organization of a university. The main difference of this study from the previous studies is that the order amount must be in palette quantity for a deterministic and stochasticdemand inventory problem. Under this constraint, an inventory model is developed and tested with several datasets. Assuming lead time as constant, the value of deterministic demand present in the system and impact of palette constraint are investigated. These investigations are compared with the status quo in the case study. It has seen that the palette quantity behaves as safety stock for high level random demand. Recommendations based on the impacts of advance demand information, lead time and pallet quantity are presented in terms of changing in ordering costs, holding costs and service level.

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Contributors

Author: Patrick Beullens

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