ISBN: 3540678719
TITLE: Strategic Safety Stocks in Supply Chains
AUTHOR: S. Minner
TOC:

1. Introduction 1
2. Single-Echelon Inventory Models 7
2.1 Terminology and Classification 7
2.1.1 Classification of Inventory Control Systems 7
2.1.2 Motives of Inventory Control and Stock Classification 8
2.1.3 Uncertainty and Planning Techniques 10
2.2 Single-Product Inventory Modeling 12
2.2.1 Demand 12
2.2.1.1 Analysis of Demand Data 13
2.2.1.2 Normal Distribution 16
2.2.1.3 Mixed-Erlang Distribution 18
2.2.2 Lead Time 19
2.2.2.1 Deterministic Lead Time 21
2.2.2.2 Stochastic Lead Time 22
2.2.2.3 Demand Correlation 23
2.2.3 Input Coefficients and Yield 25
2.2.4 Inventory Control and System Dynamics 26
2.2.5 Cost and Service Performance Measures 28
2.3 Safety Stock Planning Under Service Level Constraints 33
2.3.1 Lot-for-Lot Ordering 36
2.3.2 Batch Ordering 41
2.3.3 Stochastic Lead Times and Capacity Constraints 45
2.3.4 Lost Sales Inventory Model 46
2.3.5 Numerical Example 48
2.3.6 Aspects for Safety Stock Reduction 52
2.4 Feedforward Versus Feedback Inventory Control 54
3. Materials Coordination in Supply Chains 57
3.1 Multi-Echelon Production/Inventory Systems 57
3.1.1 Classification and Modeling Aspects 58
3.1.1.1 Serial Systems 60
3.1.1.2 Divergent Systems 61
3.1.1.3 Convergent Systems 63
3.1.1.4 General Acyclic Systems 64
3.1.1.5 General Cyclic Systems 65
3.1.2 Demand Analysis 66
3.2 Concepts of Information and Materials Flow 68
3.2.1 Installation Stock Policies 69
3.2.2 Echelon Stock Policies 70
3.2.3 Material Requirements Planning 74
4. Safety Stocks in Multi-Echelon Systems 77
4.1 Serial Systems 77
4.1.1 Full Delay Approaches 78
4.1.1.1 The Model of Clark and Scarf 78
4.1.1.2 The Algorithm of Van Houtum and Zijm 83
4.1.1.3 Models with Service Level Constrain 86
4.1.2 No Delay Approaches 87
4.1.2.1 The Model of Simpson 87
4.1.2.2 Dynamic Programming Algorithms 96
4.1.2.3 Local Search Heuristics 101
4.1.2.4 Effects in Allocation of Safety Stocks 105
4.1.3 Comparison and Synthesis 106
4.1.3.1 Adjustment of Safety Stock Levels in the Simpson Model 108
4.1.3.2 Combination of Full Delay and No Delay Approaches 111
4.1.4 Extensions of the Simpson Model 112
4.1.4.1 Different Service Measure 112
4.1.4.2 Positive Customer Service Time 116
4.1.4.3 Stochastic Processing Times 117
4.1.4.4 Batch Ordering 120
4.1.4.5 Lost Demand 122
4.2 Divergent Systems 122
4.2.1 Full Delay Approaches 122
4.2.2 Simpson Modeling Approach 125
4.2.3 Comparison and Synthesis 128
4.2.4 Extensions 128
4.2.4.1 Different Service Measure 128
4.2.4.2 Service Time Differentiation 132
4.3 Convergent Systems 139
4.3.1 Full Delay Approaches 139
4.3.2 Simpson Modeling Approach 140
4.3.3 Different Service Measure 143
4.4 General Systems 145
4.4.1 No Delay Optimization Model 145
4.4.2 Exact Solution Algorithms 148
4.4.3 Heuristic Solution Algorithms 152
4.4.3.1 Linear Approximation 152
4.4.3.2 Solution Characterization 154
4.4.3.3 Solution Construction Techniques 156
4.4.3.4 Descent Solution Improvement 156
4.4.3.5 Simulated Annealing 158
4.4.3.6 Threshold Accepting 160
4.4.3.7 Tabu Search 161
4.5 Comparative Analysis of Heuristic Solution Procedures 163
4.5.1 Test Set Generation 163
4.5.2 Definition of Performance Measures 165
4.5.3 Numerical Results 166
4.6 Cyclic Systems with External and Internal Returns 170
4.6.1 Model Formulation 170
4.6.2 Solution Principle 173
4.7 Extensions 177
5. Concluding Remarks 179
Appendix 181
A. Concavity Properties 181
A.1 Order-up-to-Policy 181
A.1.1 Safety Stock 181
A.1.2 On-Hand Stock 182
A.2 Reorder-Point, Order-Level-Policy 183
A.3 Solution Separation 184
B. Minimal Coverage Properties 187
B.1 Serial Systems 187
B.2 Divergent Systems 188
B.3 Convergent Systems 189
C. Numerical Algorithms 191
List of Symbols 183
List of Abbreviations 199
List of Figures 201
List of Tables 203
References 205
END
