Questions tagged [inventory]
For questions about mathematical models and algorithms for optimizing inventories.
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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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relationship between safetystock and service level
How is the relationship between safetystock and service level correctly simulated and what data do you need if you don't assume any distribution?
EOQ
Lead time
Demand forecast
...?
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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 ...
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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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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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To maintain safe order level from a customer
A telecommunication company (CALLME TEL Co., Ltd) receives and processes customers’ orders.
Orange Co., Ltd is an important customer, who mostly places orders every 2 months. Medium quantity of ...
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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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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 ...
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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 ...
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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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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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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 ...
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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 ...
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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 ...
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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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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 ...
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Estimate of mean lead time demand
I am trying to estimate the order-up-to level of inventory, $y_t$, according to ref [1]
$y_t = \hat{D}_t^L + z \hat{\sigma}^L_{et}$
where $\hat{D}_t^L$ is an estimate of the mean lead-time demand, $\...
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Minimizing cost of transportation and storage of items
I am looking for an optimization algorithm to minimize the cost of transportation and storage cost in warehouse.
Let's assume the following table gives us the weekly forecast of Demand.
...
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Alternate formulation for modeling inventory constraints
I'm working on a inventory optimization problem where inventory used at a time-period is computed based on price-bucket that is selected for an item. Problem contains multiple items (around 10K), 15-...
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Scheduling of planned orders while respecting certain stock levels
I am searching for the academic name of the problem of computing a valid schedule for planned order. More precisely, The problem consists of: list of orders O, available vehicle per day K, and the ...
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Confusion about how to account for leadtimes with a fixed-review period base stock(S,T) inventory policy
So we're using a fixed review period model with base stock $S$, and review period $T$ of 1 month - the period is not chosen optimally to minimise ordering cost like in an EOQ model, it's just a nice ...
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Relation between order quantity and average cycle stock
Annual demand: $1000$ units
Unit cost: $5$ dollars
Company replenishes the inventory two times per year.
Average Cycle Stock: $300$
I am asked to compare average cycle stock with number of ...
user5245
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Generating numbers that should add up to a fixed value while they follow a known distribution
Suppose a perishable item that is associated with a shelf life $m\in \mathcal{M} = \{1,\dots,M\}$. We have a periodic review system with stock level $S$, i.e., based on the inventory level of the item,...
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Recommendations for OM blogs
Could someone suggest good blogs to follow for researchers in Operations Management/ Supply Chain Management /Operations Research?
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If $F$ is MHR (log-concave), can the monopoly reserve price exceed the mean?
Let $V\sim F$ be some positive valued random variable such that $F$ has a monotone hazard rate (alternatively $F$ is log-concave). Let $p = \operatorname{argmax}q(1-F(q))$. We call $p$ the monopoly ...
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Lead time higher than cycle time in static EOQ model
All the examples I saw so far were for the case when lead time is smaller than the cycle period. What should the reorder point be if lead time is higher than the cycle time? Should I just simply order ...
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inventory control for vending machine like mini store
Let's say we have a kiosk inside gas station selling cigarettes and snacks outside a supermarket. There are limited space for each product. The kiosk only allows to get restocked from the supermarket, ...
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Safety Stock with Fill Rate Criterion
When applying the base stock inventory policy, assuming the daily demands are normally distributed with parameter $(\mu, \sigma)$, we can find the optimal parameter $S$ (the base stock level) in ...
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Concepts for managing inventory and orders with specific fulfillment date
I'm modeling a fairly basic order and inventory management system but with a use case that doesn't seem very common (or at least hard to look up online and in books about operations): the order ...
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Scaling of standard deviation for forecast error
I am doing inventory optimization for my firm and need to compute the safety stock for a couple of products. I have learned that the correct quantity to consider in calculating the safety stock is the ...
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Safety stock calculation with production forecast variance
I am trying to find an safety stock calculation where the expression incorporates:
Lead time variance
Sales demand variance &
Production forecast variance
My calculation so far is based on the ...
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How to calculate Cycle & Safety Stock
I have been asked to calculate cycle and safety stock levels for one of our business units. I have very little/no knowledge on the subject of inventory theory so would like to ask what a reasonable ...
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Reorder point and safety stock for very long lead times
I have previously asked this problem here-Lead time longer than cycle time, but I keep getting more confused the more I think about it. Using the Q,R inventory model, suppose my mean monthly demand $\...
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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 ...
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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 ...
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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,
$$...
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(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 ...
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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 ...
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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-...
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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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An upper-bound on the value of $S$ in $(s,S)$ policy
I recently have come across a problem which can be categorized as a stochastic optimization. The problem seems simple, but I haven't been able to solve it yet. It has a major impact on algorithm ...
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Safety stock when there is uncertainty in order completion
Safety stocks account for uncertainty both on demand and provider lead times, but never mention how to include the effect of incomplete orders. For example, what would happen if a provider always ...
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Can demand be modeled by a limited amount of probability distributions?
In stochastic inventory control, it is very important to model the demand appropriate to set e.g. order levels. Demand can be fit to a certain probability distribution via many means (e.g. a goodness ...
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Modelling a simple ordering problem to have balanced delivery days
Assuming that I should buy 50 items from 25 different vendors with pre-known delivery duration between 2-7 day for each, which day of a week should I place each order so that the delivery days be even ...
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Can I use an MDP for a stochastic inventory model when my demand distribution is non-stationary?
Most formulations of Markov Decision Processes for stochastic inventory models I've come across assume a fixed demand distribution.
But in my case I have a time series forecast with a non stationary ...
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Holding cost vs carrying cost vs storage cost
I was reading an article on supply chain management and encountered a number of inventory costs like ordering, carrying, shortage, holding, storage costs. I cannot understand the difference between ...
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Approaches for choosing a "risk" factor in an Inventory Optimization problem?
I'm working on an Inventory Optimization (Allocation) problem.
The decision variable is the amount of inventory budget to allocate for each product, from a set of products. My objective is to ...
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