• The Journal of Information Systems
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• v.30 no.1
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• pp.151-177
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• 2021

Purpose This paper aims to improve management performance by effectively responding to production needs and reducing inventory through synchronizing production planning and procurement in the aviation industry. In this study, the differences in production planning and execution were first analyzed in terms of demand, supply, inventory, and process using the big data collected from a domestic aircraft manufacturers. This paper analyzed the problems in procurement and inventory management using legacy big data from ERP system in the company. Based on the analysis, we performed a simulation to derive an efficient procurement and inventory management plan. Through analysis and simulation of operational data, we were able to discover procurement and inventory policies to effectively respond to production needs. Design/methodology/approach This is an empirical study to analyze the cause of decrease in inventory turnover and increase in inventory cost due to dis-synchronize between production requirements and procurement. The actual operation data, a total of 21,306,611 transaction data which are 18 months data from January 2019 to June 2020, were extracted from the ERP system. All them are such as basic information on materials, material consumption and movement history, inventory/receipt/shipment status, and production orders. To perform data analysis, it went through three steps. At first, we identified the current states and problems of production process to grasp the situation of what happened, and secondly, analyzed the data to identify expected problems through cross-link analysis between transactions, and finally, defined what to do. Many analysis techniques such as correlation analysis, moving average analysis, and linear regression analysis were applied to predict the status of inventory. A simulation was performed to analyze the appropriate inventory level according to the control of fluctuations in the production planing. In the simulation, we tested four alternatives how to coordinate the synchronization between the procurement plan and the production plan. All the alternatives give us more plausible results than actual operation in the past. Findings Based on the big data extracted from the ERP system, the relationship between the level of delivery and the distribution of fluctuations was analyzed in terms of demand, supply, inventory, and process. As a result of analyzing the inventory turnover rate, the root cause of the inventory increase were identified. In addition, based on the data on delivery and receipt performance, it was possible to accurately analyze how much gap occurs between supply and demand, and to figure out how much this affects the inventory level. Moreover, we were able to obtain the more predictable and insightful results through simulation that organizational performance such as inventory cost and lead time can be improved by synchronizing the production planning and purchase procurement with supply and demand information. The results of big data analysis and simulation gave us more insights in production planning, procurement, and inventory management for smart manufacturing and performance improvement.

• IE interfaces
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• v.12 no.2
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• pp.222-236
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• 1999

This paper presents a design and implementation of an intelligent-integrated production-logistics systems. The situation considered here is that there are multiple manufacturing plants and multiple distribution centers. Effective distribution resource and production planning are required to reduce inventory cost and to avoid inventory shortage. We propose an intelligent forecasting scheme of each distribution centers, adaptive inventory replenishment planning, distribution resource planning, and integrated production planning system. In forecasting a huge number of on-line model identification is performed using neural network approximation capability. An efficient adaptive replenishment planning and distribution resource planning are also presented in connection with forecasting scheme. An appropriate production is also requested based on production lead-time and the results of distribution planning. Experimental simulations are presented to verify the proposed approach using real data.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 1999.04a
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• pp.426-426
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• 1999

;There are many sources of uncertainty in a typical production and inventory system. There is uncertainty as to how many items customers will demand during the next day, week, month, or year. There is uncertainty about delivery times of the product. Uncertainty exacts a toll from management in a variety of ways. A spurt in a demand or a delay in production may lead to stockouts, with the potential for lost revenue and customer dissatisfaction. Firms typically hold inventory to provide protection against uncertainty. A cushion of inventory on hand allows management to face unexpected demands or delays in delivery with a reduced chance of incurring a stockout. The proposed strategies are used for the design of a probabilistic inventory system. In the traditional approach to the design of an inventory system, the goal is to find the best setting of various inventory control policy parameters such as the re-order level, review period, order quantity, etc. which would minimize the total inventory cost. The goals of the analysis need to be defined, so that robustness becomes an important design criterion. Moreover, one has to conceptualize and identify appropriate noise variables. There are two main goals for the inventory policy design. One is to minimize the average inventory cost and the stockouts. The other is to the variability for the average inventory cost and the stockouts The total average inventory cost is the sum of three components: the ordering cost, the holding cost, and the shortage costs. The shortage costs include the cost of the lost sales, cost of loss of goodwill, cost of customer dissatisfaction, etc. The noise factors for this design problem are identified to be: the mean demand rate and the mean lead time. Both the demand and the lead time are assumed to be normal random variables. Thus robustness for this inventory system is interpreted as insensitivity of the average inventory cost and the stockout to uncontrollable fluctuations in the mean demand rate and mean lead time. To make this inventory system for robustness, the concept of utility theory will be used. Utility theory is an analytical method for making a decision concerning an action to take, given a set of multiple criteria upon which the decision is to be based. Utility theory is appropriate for design having different scale such as demand rate and lead time since utility theory represents different scale across decision making attributes with zero to one ranks, higher preference modeled with a higher rank. Using utility theory, three design strategies, such as distance strategy, response strategy, and priority-based strategy. for the robust inventory system will be developed.loped.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.43 no.4
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• pp.142-149
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• 2020

A manufacturing company should produce its products and make a profit to continue its management. With the adoption of a multi-category small-volume production system, manufacturers that produce concrete pump-cine products are carrying out improvement activities to increase their market share amid the business-to-customer business environment. However, the slump in the construction investment environment has led to a decline in sales of concrete pump trucks. The purpose of holding inventory is to prevent loss of sales opportunities with the rate of change in the sales plan, and reducing the rate of change in the product can reduce unnecessary inventory and, in order to realize this, the goal of reducing inventory can be achieved by reviewing the parts that can be designed for common use. Therefore, to reduce the inventory of concrete pump trucks, semi-finished publicization design is necessary. According to the analysis, the frame assembly process of the 32M model is common. Production capacity can be secured without loss of sales opportunity.

• IE interfaces
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• v.6 no.1
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• pp.47-54
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• 1993

Sequential Numbering System(SNS) is one of the production and inventory management system, which is more effective and practical to minor enterprises than Material Requirement Planning (MRP) system or Just-in-Time(JIT) system. The purpose of the paper is the structured analysis of SNS as the first phase of software development. Data Flow Diagram(DFD), Data Dictionary(DD), and Mini-Specs are used to analyze the system through the second level. The result can be exploited to SNS software design and programming.

• The Journal of Information Systems
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• v.12 no.2
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• pp.129-149
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• 2003

One of the important applications in Enterprise Resource Planning(ERP) systems is the Manufacturing Resource Planning(MRPII) system using Bill of Material(BOM). The manufacturing resource planning determines the quantity and timing of the production or purchase of subassemblies and raw materials needed to support the Master Production Scheduling(MPS). The bill of material is the recipe, a list of the materials needed to make a product. This paper intends to suggest a component-based materials management system using Unified Modeling Language(UML), as an application system for automobile part industry. Applying component based materials management systems designed with UML methodology, we analyzed the workflow and the document on materials management process from production planning to inventory management, and implemented a prototype of efficient materials management system, as a surrogate of existing material requirement planning(MRPI) system. To produce many other assemblies for a automobile part firm, component parts are assembled into subassemblies that are joined to assemble the finished product. Through the system suggested in this study, the level of inventory has cut down and the cost of inventory management has decreased. Also, the development method using UML makes the analysis and design phase to shorten in implementation period of MRPII system. The implementation of materials management system using CBD shows the ease of use in software reuse and the interoperability with corporate Internal information system. The result of applying object-oriented CBD technique is to minimize the risk of life cycle and facilitate the reuse of software as mentioned to limitation of information engineering methodology.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2008.10a
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• pp.267-284
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• 2008

Consider a supply chain where products are produced at a manufacturing system, shipped to a distribution center, and then supplied to customers. The distribution center controls inventory based on a base-stock policy, and whenever a unit of product is demanded by a customer, an order is released to the production system. Unsatisfied demand is backordered, and the inventory and backordered units are a function of the base-stock level. The manufacturing system is modeled as an M/M/s/c queueing system, and orders exceeding the limited buffer capacity are blocked and lost. The throughput of the manufacturing system and the steady state distribution of the outstanding orders are functions of number of servers and buffers of the manufacturing system. There is a profit obtained from throughput and costs due to servers and buffers of the manufacturing system, and also costs due to inventory positions of the distribution center, and we want to maximize the total production profit minus the total cost of the supply chain by simultaneously determining the optimal number of servers and buffers of the manufacturing system and the optimal base-stock level of the distribution center. We develope two algorithms, one analytical but without guarantee of the optimal solution and one optimal but without complete analytical proofs. The problem integrates strategic problem of the manufacturing system with tactical problem of the distribution center in a supply chain.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.18 no.36
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• pp.93-103
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• 1995

This paper des with an economic production quantity model with partial backorders for the situation in which production lead time is deterministic and demand during lead time follows a continuous distribution. In the model, an objective function is formulated In minimize an average annual inventory cost. And then the procedure of iterative solution method for the model is developed to find both production reorder point and production quantity. Finally, sensitivity analysis for various partial backorder ratios and standard deviations of demand during production lead time are presented.

• Journal of the Korea Safety Management & Science
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• v.3 no.1
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• pp.93-105
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• 2001

Many production management systems for increasing productivity, minimizing inventory, keeping due dates and maximizing use of resources have been proposed, and GT, MRP and JIT are frequently used among these systems. The three systems have merits and demerits through comparing with each other. Because each system has mutual dependence, a hybrid production system Is necessary for using their merits maximally. In this study, a hybrid production system is designed by combining GT, MRP and JIT, which is suitable in the domestic production system and it is presented as followings. -. Basic research works for G7, MRP and JIT. -. Comparison and analysis are carried out for each system.- . The hybrid production system is designed. -. The hybrid production system is developed.

• Journal of Institute of Control, Robotics and Systems
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• v.3 no.4
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• pp.398-405
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• 1997

This article presents a new model which is called Periodic Square-Wave(PSW) to describe the material flow of the periodic processes involving intermediate buffer. The material flows incoming into and outgoing from the intermediate buffer are assumed to be periodic square shaped. PSW model gives the same result as that of Economic Production Quantity(EPQ) model for determining optimal lot size of single stage batch storage system. However, for batch storage serial train system, PSW model gives a different optimal solution of about 6 % reduced total cost. PSW model provides the more accurate information on inventory and production system than the classical approach by maintaining simplicity and increasing computational burden.