# Questions tagged [inventory]

For questions about mathematical models and algorithms for optimizing inventories.

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### Operation research

If the machine and its part are purchased together, the cost of the part for the machine is 500 TL. is. If you want to purchase the part separately from the machine, the price of the part is 1200 TL. ...
29 views

### Determine (in 2 iterations)

A company following the reorder level policy has the following costs associated with a given product: ordering cost of 100 monetary units (u.m.) per order; stock holding cost of 12 u.m. per unit per ...
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1 vote
52 views

### Order Quantity Formula with multiple pipeline shipments allowed

I'm working an inventory problem for a client where we're trying to identify optimal order size and safety stock value when we can have multiple shipments in the pipeline (long lead time). All the ...
• 793
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### Forecasting based inventory management

In most text books on inventory management and inventory optimisation I have come across, it is assumed that demand follows some known distribution (often a normal distribution). However, when talking ...
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### Deploying optimization model to production environment

I have developed an inventory optimization model for my warehouse and I want to know, how to validate this model, perform User acceptance testing and deploy it to production environment?
103 views

### Periodic Review System of Inventory to setup Target Days of Supply

Background: I am working on defining Target Days of Supply for a periodic review system with a review period of 1 week. I have weekly demand data for the complete year. I can calculate Mean weekly ...
91 views

### Optimizing Safety Stock in a Multi Echelon Optimization

In general the relationship between safety stock and service level is non-convex. As it contains often a Normal distribution or simulation. If one considers now optimization the supply chain by ...
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128 views

### Seeking Help: Algorithm Recommendations for Inventory Data Adjustment

I am currently working with inventory fluctuation data for a company and facing some issues. The raw data is stored in an xls file, recorded on a monthly basis. According to the logic, the sum of the ...
1 vote
196 views

### Multi-period Inventory Balance in Gurobipy

I would like to get the inventory balance in the oponed facility $\text{C}$ such that, the Inventory at time $t$ is equal to the previous one, plus the inflow minus the outflow. I have tried to create ...
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100 views

### use Forecast distribution width in inventory optimization

I have a demand forecast that gives me a distribution for future demand, for each time period in percentiles (e.g. demand for period 1 will be between 6 and 25 (zero and 100th percentiles, and i know ...
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122 views

### To maintain safe order level from a customer

A telecommunication company (CALLME TEL Co., Ltd) receives and processes customersā orders. Orange Co., Ltd is an important customer, who mostly places orders every 2 months. Medium quantity of ...
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208 views

### How to model not-met demand to next period?

I am trying to include to my model a demand shift. That is, I am having a fixed demand for each period (t), but because of capacity constraints I am not able to serve the whole demand for each period. ...
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143 views

### Inventory Continuity Equation

I have to minimize the inventory remaining at end of the period(28 days). Each item would perish after a fixed number of days and we can order items only on certain weekdays(M,T,S,S). Demand is ...
1 vote
283 views

### MILP modeling Code with pyomo or gurobi or cplex or GAMS. Any link?

I am looking for MILP modeling code with stochastic/deterministic demand for Inventory ordering policy (e.g. (q,r) or (s,S) policy) with pyomo or gurobi or cplex or GAMS. Any link?
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### Marginal Cost of Storage vs. sum of storage cost

I'm working on a model for inventory management. I'm trying to decide for each unit if it is worth holding, or if it should be liquidated at a cost $x$. I'm wondering about the argument that marginal ...
• 83
1 vote
86 views

### Literature on fixed-charge network flow problems with inventory levels

I'm looking for optimization problem classes with inventory control constraints. Given a directed graph $G(V,A)$ where vertex set $V$ consists of production nodes and demand nodes. The arc set $A$ ...
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### Stochastic optimization for inventory management

The deterministic problem is to minimize operational cost subject to constraints in demand, supply and capacity. The ordering policy is periodic review, order-up-to. The stochastic version of the ...
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1 vote
72 views

### Improving Customer First Fulfillment Rate

Data Available: Historical Weekly Demand Total SKU's = ~ 2500 Historical Lead times (Most Suppliers' Shipping from Asia to the US) Problem to solve: Improve First Fulfillment Rate to the Customer ...
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1 vote
143 views

### Simple inventory control with stochastic demand

There is a factory that produces one unit of stock uniformly so that $q$ units of stock are produced during a day. The warehouse near a factory has the maximal capacity of $q$ items, i.e. a daily ...
• 11
137 views

### Expected onhand inventory in (s,S) policy

When we are doing inventory optimization, say implementing a base-stock policy, one of the KPIs we monitor is the average on-hand inventory, which we use to calculate the average inventory holding ...
• 245
366 views

### Derivation of safety stock formula of an inventory model with probabilistic demand

I am applying the "Probabilistic inventory model with safety stock". There are some assumptions in this model: normally distributed demand, fixed lead time (time between placing the order of ...
1 vote
85 views

### Convex Optimization with Variable Dependency / no unmet demand carry forward

I'm running into an issue with a Linear Optimization Problem. The ultimate goal is to come back with an optimal production quantity (prod_qty) across several items ...
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262 views

### One-time price discount Inventory Model

I'm learning operations research and this is a question that I came across: The monthly demand for your family is 10kg, which is bought monthly. The maximum retail price (MRP) is INR400, on which ...
1k views

2k views

### Monte-Carlo Simulations in inventory management

I am using Monte-Carlo simulations in Microsoft Excel to determine optimum reorder points and safety stock levels. I have the demand patterns of the last one year of the product. Using that I can ...
724 views

### Safety stock for lumpy demand

I have a product for which the monthly demand pattern for the last year looks like the following. The product is ordered only 22 days out of 366 days in batch sizes of 272 kgs. Since there are so many ...
1k views

### Lead time longer than cycle time

I am trying to calculate the reorder point and safety stock for a pharmaceutical product. I am using this formula $$r = \mu_{LTD} + z_\alpha\sigma_{LTD}.$$ $$SS = z_\alpha\sigma_{LTD}.$$ where, ...
78 views

### (Q,R) inventory policy with supplier disruptions

I am trying to understand the (Q,R) inventory policy with a type 1 service level and demand and lead time modelled as normal distributions. As far as I have understood, the assumption is that the ...
127 views

### Estimating optimal inventory in times of high uncertainty due to coronavirus

I'm trying to help out a relative of mine who runs a small highly seasonal business in the clothing/textiles industry. 80% of sales are in Q1 of every year, and the purchasing and manufacturing ...
• 151
850 views

### Safety stock for log-normal distribution demand

I came across this example on how to model your lead time demand as a log-normal distribution and calculate the safety stock. https://www.linkedin.com/pulse/why-you-keep-missing-your-service-level-...
208 views

### Inventory Theory

I've been doing a bit of inventory theory, and just wanted to know if I could interpret: "Tim has decided to keep enough safety stock to prevent a shortage before the delivery arrives during 95 ...
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### How to form math model to solve this problem using cplex

Hiring company has the following requirement within a year; week 1 to 5: 20 week 6 to 20: 40 week 21 to 40: 35 week 41 to 60: 55 week 61 to 80:75 week 81 to 100: 60 Training time for an ...
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