• Journal of Korean Society of Industrial and Systems Engineering
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• v.39 no.4
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• pp.15-25
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• 2016

SCM activities in a company are considered as total innovation through synchronizing supply and demand while maintaining appropriate inventory level and reducing the business operating costs. Until now, even several researches are carried out on the SCM performance of the companies which have introduced and been operating SCM, the research on the cost analysis for the inventory which occurs frequently on supply chain is still insufficient. Especially, for the electronics industry in which the product depreciation is sharp caused by the short product life cycle and the complexity of distribution channels, even the inventory related costs are a major factor in business management, since the current estimated criteria of inventory costs are limited to the interest and maintenance management costs, the criteria do not reflect the total influence of the product depreciation and lost opportunity cost which are related to the business management. Furthermore, even though the rapid price drops of the distributor inventory caused by the frequent new model launch can be covered by the product manufacturers, the scale of total costs related to the inventory has not been conceived because the price compensation is traditionally considered as a market costs. In this research, we analyzed the inventory characteristics of electronics industry in which the price depreciation happens frequently, newly defining the estimated criteria of the product total inventory cost which includes price depreciation from the product manufacturers' view. Finally we focus on the case study of a representative electronics company and verify the scale of the influence on management performance.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2006.11a
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• pp.391-402
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• 2006

Most previous studies considering inventory models for imperfect quality assumed that defective items could be completely detected by inspection and fixed before delivery to customers. This makes it difficult to adopt their research results to practice. This study reduces the assumption of perfect inspection, and presents an inventory model considering reverse logistics caused by imperfect inspection. System dynamics model is used to describe complex and dynamic problem and to show the effect of imperfect inspection on profit by simulation. Then, this article provides a guideline for the inspection policy which provides the maximum profit.

• Industrial Engineering and Management Systems
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• v.4 no.2
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• pp.145-157
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• 2005

There are a lot of raw materials, work-in-processes and finished goods in manufacturing industry. Here, the less stock of materials and work-in-processes manufacturing industry has, the worse the rate of the production is. Inversely, the more manufacturing industry has, the more expensive the cost to support them is. Thus, it is important for us to balance them efficiently. In general, inventory problems are to decide appropriate times to produce goods and to determine appropriate quantities of goods. Therefore, inventory problems require as more useful information as possible. For example, there are demand, lead time, ordering point and so on. In this paper, we deal with an optimal ordering policy on both way substitutable two-commodity inventory control system. That is, there is a problem of how to allocate the produced two kinds of goods in a factory to m areas so as to minimize the total expected inventory cost. The demand of each area is probabilistic, and we adopt the exponential distribution as a probability density function of demand. Moreover, we provide numerical examples of the problem.

• Industrial Engineering and Management Systems
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• v.9 no.4
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• pp.303-311
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• 2010

In the last few years growing interest has been dedicated to supply chain management. Modeling complexity is added to supply chain coordination problem by accounting for reverse logistics activities. The objective of this paper is to extend inventory model of manufacturing factory with respect to the production of raw material of forward logistics and recycling material of reverse logistics. The proposed model is applied to a plastic recycling process plant located in Taiwan. The case study improvement scheme shows when the recycling rate of recycling material increases from 15% to 50%, the total inventory cost of manufacturing factory decreases by 12.82%, safety stock volume decreases by 41.19% and the reorder quantity is down by 50.96%. This paper finds whether the results of the model can reach the economic profit through quantitative analysis and encourages companies integrate reverse logistics into the supply chain system.

• Industrial Engineering and Management Systems
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• v.8 no.2
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• pp.80-92
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• 2009

This paper addresses the inventory rationing issue embedded in the regional supply chain inventory replenishment problem (RSIRP). The concerned supply chain, which was fed by the national supply chain, consisted of a single warehouse distributing a single product to multiple stores (M-stores) with independent and normally distributed customer demand. It was assumed that the supply chain operated under the order-up-to level inventory replenishment system and had only one truck at the regional warehouse. The truck could make one replenishment trip to one store per period (a round trip per period). Based on current inventories and the vehicle constraint, the warehouse must make two decisions in each period: which store in the region to replenish and what was the replenishment quantity? The objective was to position inventories so as to minimize lost sales in the region. The warehouse inventory was replenished in every fixed-interval from a source outside the region, but the store inventory could be replenished daily. The truck destination (store) in each period was selected based on its maximum expected shortage. The replenishment quantity was then determined based on the predetermined order-up-to level system. In case of insufficient warehouse inventories to fulfill all projected store demands, an inventory rationing rule must be applied. In this paper, a new inventory rationing rule named Expected Cost Minimization (ECM) was proposed based on the practical purpose. The numerical results based on real data from a selective industry show that its performance was better and more robust than the current practice and other sharing rules in the existing literature.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.37 no.1
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• pp.141-150
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• 2014

Due to their accessibility and 24-hr availability, convenience stores are an integral part of daily lives. Because they sell a limited number of products and have small shelf space, shelf space allocation and inventory replenishment are important considerations for inventory management that critically affect profit. In this paper, we propose five solutions for the vendor-managed inventory problem of convenience stores that maximize profit while considering stock-out-based product substitutions. The performance of the proposed solutions is evaluated via simulation to reflect the demand uncertainty and marketing activity.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.36 no.1
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• pp.96-102
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• 2013

This paper makes a detailed comparison between two metrics designed for measuring customer's satisfaction in the retail industry. The first metric, which is called the customer service level, has not been widely used due to the intrinsic requirement on the parameter assumption(s) of the demand distribution. Unlike the customer service level metric the in stock ratio metric does not require any requirements on the demand distribution. And the in stock ratio metric is also very easy to understand the meaning. To develop the detailed planning activities for business with the in stock ratio metric on hand one should collect some information as following : 1) POS (Point of sales) data, 2) Inventory Data 3) Inventory Trend.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.21 no.12
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• pp.449-455
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• 2020

Inventory management is one of the important business functions for manufacturing companies to determine market responsiveness. Customers' needs are diversifying, and the life cycle of products is decreasing, thus increasing the importance of inventory management. However, for small-scale manufacturing companies, investing in an IT system for inventory management is practically difficult. In this study, we introduce an inventory and warehouse management model that can be applied simply and quickly in small-scale manufacturing companies. Firstly, we introduce the concept of the properties of inventory and provide an analytical methodology based on the age and quantity of the inventory. Secondly, in accordance with the properties of the inventory, we introduce location management rules for warehouse operation. To apply the proposed model, we studied a wallpaper manufacturing company and verified the applicability of the proposed methods in the field. The proposed model can be applied immediately as part of on-site improvement activities by small-scale manufacturing companies, and inventory management activities are expected to reduce bad long-term inventory and further secure storage capacity for warehouses.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.39 no.3
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• pp.170-179
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• 2016

In this paper we have tackled the outstanding inventory planning problems over new product launching period in a more holistic manner by addressing first the definition of efficient business rules to effectively control and reduce the inventory risks followed by the rigorous explanations on the implementation guide on suggested inventory planning rules. It is not unusual for many companies in the consumer electronics market to make a great effort to reduce the time to launch a new product because the ability to bring out higher performing products in such a short time period greatly increases the probability for them to remain competitive in the high tech market. Among so many newly developed products, those products with new features and technologies appeal to many potential customers while products which fail to win customers by design and prices rapidly disappear in the market. To adapt to this business environment, those companies have been trying to find the answer to minimize the inventory of old products so they can move to next generation products quickly with less obsolete material. In the experimental implementation of our rule-based inventory planning, Company 'S' reduced the inventory cost for the outgoing products as low as 49% of its peak level of its preceding product version in just 5 month after the adoption of rule-based inventory planning process and system. This paper concluded the subject with a suggestion that the best performance of rule-based inventory planning is guaranteed not from one-time campaign of process improvement along with system development but the decision maker's continuing support and attention even without seeing any upcoming business crisis.

• Journal of Korean Institute of Industrial Engineers
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• v.34 no.1
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• pp.1-12
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• 2008

The Kanban system in Just-In-Time (JIT) production is very effective in reducing the inventories when consumption rate of the final product is relatively stable. When large fluctuations exist in the consumption rate, a new production ordering policy in which the production order quantity is determined by smoothing the demands exponentially is more suitable. This new ordering policy has not been investigated sufficiently. In this research, a multi-stage production and inventory system with stock points for materials and finished items located at each stage is considered. Approximations of average inventories at each stage in the system are derived theoretically. Numerical simulations are carried out to assess the accuracy of approximations and to evaluate the effectiveness of the new ordering policy as compared with the Kanban system. As a result, it is shown that the new ordering policy can achieve significantly lower inventory costs than the original Kanban system. The new ordering policy thus emerges as a key concept for an effective supply chain management.