• Journal of Korean Society of Industrial and Systems Engineering
• /
• v.32 no.4
• /
• pp.45-52
• /
• 2009

The objective of this was to improve a transportation cost relation between Central Distribution Centers(CDCs) and Regional Distribution Centers(RDCs), to control inventory cost concerning safety stock for each service level, by reviewing distribution steps connecting CDCs and RDCs under the price discount. It was also to examine and compare operating costs for the following two alternative suggestions for setting the service standard as a counter measure for a stock-out of the distribution network system management. First, provision by dispersing the safety stock to the CDCs and RDCs; and second, exclusive provision of the safety stock only to the RDCs. The cost comparison analysis was made for each category of purchase costs, regular transportation costs, express transportation costs, and inventory holding costs.

• Journal of Korean Society of Industrial and Systems Engineering
• /
• v.43 no.3
• /
• pp.61-67
• /
• 2020

The fourth industrial revolution encourages manufacturing industry to pursue a new paradigm shift to meet customers' diverse demands by managing the production process efficiently. However, it is not easy to manage efficiently a variety of tasks of all the processes including materials management, production management, process control, sales management, and inventory management. Especially, to set up an efficient production schedule and maintain appropriate inventory is crucial for tailored response to customers' needs. This paper deals with the optimized inventory policy in a steel company that produces granule products under supply contracts of three targeted on-time delivery rates. For efficient inventory management, products are classified into three groups A, B and C, and three differentiated production cycles and safety factors are assumed for the targeted on-time delivery rates of the groups. To derive the optimized inventory policy, we experimented eight cases of combined safety stock and data analysis methods in terms of key performance metrics such as mean inventory level and sold-out rate. Through simulation experiments based on real data we find that the proposed optimized inventory policy reduces inventory level by about 9%, and increases surplus production capacity rate, which is usually used for the production of products in Group C, from 43.4% to 46.3%, compared with the existing inventory policy.

• Journal of Korean Society of Industrial and Systems Engineering
• /
• v.46 no.2
• /
• pp.109-115
• /
• 2023

This paper studied the problem of determining the optimal inventory level to meet the customer service target level in a situation where the customer demand for each branch of a nationwide retailer is uncertain. To this end, ISR (In-Stock Ratio) was defined as a key management indicator (KPI) that can be used from the perspective of a nationwide retailer such as Samsung, LG, or Apple that sells goods at branches nationwide. An optimization model was established to allow the retailer to minimize the total amount of inventory held at each branch while meeting the customer service target level defined as the average ISR. This paper proves that there is always an optimal solution in the model and expresses the optimal solution in a generalized form using the Karush-Kuhn-Tucker condition regardless of the shape of the probability distribution of customer demand. In addition, this paper studied the case where customer demand follows a specific probability distribution such as a normal distribution, and an expression representing the optimal inventory level for this case was derived.

• Journal of Korean Institute of Industrial Engineers
• /
• v.38 no.2
• /
• pp.89-97
• /
• 2012

This paper considers a manufacturer with a two-station make-to-stock and make-to-order serial production system. The MTS facility produces a single type of component and provides components for the MTO facility that produces customized products. In addition to the internal demand from the MTO facility, the MTS facility faces demands from the spot market with the option of to accept or reject each incoming demand. This paper addresses a joint component inventory rationing and batch production control which maximizes the manufacturer's profit. Using the Markov decision process model, we investigate the structural properties of the optimal inventory rationing and batch production policy, and present two types of heuristics. We implement a numerical experiment to compare the performance of the optimal and heuristic policies and a simulation study to examine the impact of the stochastic process variability on the inventory rationing and batch production control.

• Journal of Korean Society for Quality Management
• /
• v.22 no.1
• /
• pp.214-218
• /
• 1994

An inventory supplies stock continuously at a constant rate. A deliveryman arrives according to a Poisson process. If the level of the inventory, when he arrives, exceeds a threshold, no action is taken, otherwise a delivery is made by a random amount. Costs are assigned to each visit of the deliveryman, to each delivery, to the inventory being empty and to the stock being kept. It is shown that there exists a unique arrival rate of the deliveryman which minimizes the average cost per unit time over an infinite horizon.

• Proceedings of the KSRS Conference
• /
• 2008.10a
• /
• pp.41-44
• /
• 2008

In this paper, major species of tree were discriminated in compartment by using LiDAR data and optic imagery. This is an important work in forest field. A current digital stock map has created the aerial photo and collecting survey data. Unlike high resolution imagery, LiDAR data is not influenced by topographic effects since it is an active sensory system. LiDAR system can measure three dimension information of individual tree. And the main methods of this study were to extract reliable the individual tree and analysis techniques to facilitate the used LiDAR data for calculating tree crown 2D parameter. We should estimate the forest inventory for calculating parameter. 2D parameter has need of area, perimeter, diameter, height, crown shape, etc. Eventually, major species of tree were determined the tree parameters, compared a digital stock map.

• Journal of Korean Society of Industrial and Systems Engineering
• /
• v.11 no.17
• /
• pp.47-54
• /
• 1988

Korean National Railroad(K.N.R) playing a important role in land transportation gives us many problems to solve considering proper management of National Budget and development of the state of operation by maintaining train parts rationally as public services. According this study is to show inventory provision system for deciding the safety inventory level as the better rational method. Bibliography for this study is limited to only three kinds of seven brakes-shoe which is produced by T workshop in Korean National Railroad. To reduce the holding cost coming from the want of the stock and shortage cost of the stock expected. This study is to present a ratio of shortage on the stock permitted for the last definite period and the demand result forecast per month.

• Journal of Information Technology Services
• /
• v.10 no.3
• /
• pp.49-59
• /
• 2011

A ship scheduling model is presented for the raw material transportation problem with yard storage constraints in a steel mill. The problem is formulated as 0, 1 mixed integer programming considering such constraints as loading port conditions, ship size and hold capacity, unloading conditions, and yard storage space. In addition, inventory related constraints including safety stock are taken into consideration to support the continuous operations of steel making process. The proposed model has been implemented and applied successfully to a real world problem, and its results show the improvement of performance compared to the traditional method. For example, the arrival dates of ships are determined satisfying the constraints. The total inventory level is minimized at the stock yard as a result. Also, the safety inventory level is always kept at the planning stage, and the standard deviation of total inventory level is reduced significantly. Further research is expected to develop efficient heuristics to have a better response time for even larger scale problems.

• Journal of the Korean Operations Research and Management Science Society
• /
• v.32 no.1
• /
• pp.93-104
• /
• 2007

We consider a supply chain where products are shipped to warehouse from manufacturing system to customers. Products are supplied from either in-house regular manufacturing or the secondary source such as subcontractor. The inventory in warehouse is controlled by base-stock policy, that is, whenever a demand arrives from customer, an order is released to the manufacturing system. Unsatisfied demand is backlogged. The manufacturing system is modeled as M/M/s+1/c queueing system, and the orders exceeding the given limit care blocked and lost. The steady state distribution of the outstanding orders and the throughput of the manufacturing system are functions of the level of engagement In the secondary source. There is a profit obtained from throughput and cost not only due to the engagement of the secondary source in the manufacturing system but also inventory positions. We want to maximize the total production profit minus the total cost of the production system by simultaneously determining the optimal level of engagement of the secondary source and the optimal base-stock level of the inventory. We develop two algorithms : one without guarantee of the optimal solution but with the small number of computations, the other optimal but with more computations.

• Industrial Engineering and Management Systems
• /
• v.12 no.3
• /
• pp.172-180
• /
• 2013

We herein consider a stochastic multi-item inventory management problem in which a warehouse sells multiple items with stochastic demand and periodic replenishment from a supplier. Inventory management requires the timing and amounts of orders to be determined. For inventory replenishment, trucks of finite capacity are available. Most inventory management models consider either a single item or assume that multiple items are ordered independently, and whether there is sufficient space in trucks. The order cost is commonly calculated based on the number of carriers and the usage fees of carriers. In this situation, we can reduce future shipments by supplementing items to an order, even if the item is not scheduled to be ordered. On the other hand, we can reduce the average number of items in storage by reducing the order volume and at the risk of running out of stock. The primary variables of interest in the present research are the average number of items in storage, the stock-out volume, and the number of carriers used. We formulate this problem as a multi-objective optimization problem. In a numerical experiment based on actual shipment data, we consider the item shipping characteristics and simulate the warehouse replenishing items coordinately. The results of the simulation indicate that applying a conventional ordering policy individually will not provide effective inventory management.