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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. ...
Merissa's user avatar
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0 answers
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 ...
Ana's user avatar
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1 vote
0 answers
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 ...
Ralph Asher's user avatar
2 votes
1 answer
31 views

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 ...
Sune's user avatar
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0 votes
1 answer
86 views

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?
Vamsi Krishna Kunapareddy's user avatar
0 votes
1 answer
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 ...
0202SupplyChainOperations's user avatar
0 votes
1 answer
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 ...
test's user avatar
  • 9
3 votes
1 answer
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 ...
Blair Zhang's user avatar
1 vote
4 answers
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 ...
Abde's user avatar
  • 81
2 votes
2 answers
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 ...
Jan's user avatar
  • 83
0 votes
1 answer
122 views

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 ...
Mark K's user avatar
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2 votes
2 answers
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. ...
Lau's user avatar
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2 answers
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 ...
Shilpi Bhargava's user avatar
1 vote
2 answers
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?
Peter's user avatar
  • 29
2 votes
1 answer
89 views

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 ...
Jan's user avatar
  • 83
1 vote
1 answer
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 $A$ ...
Joris Kinable's user avatar
4 votes
0 answers
164 views

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 ...
anerjee's user avatar
  • 119
1 vote
2 answers
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 ...
Vivek's user avatar
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1 vote
0 answers
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 ...
user8949's user avatar
2 votes
1 answer
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 ...
TTY's user avatar
  • 245
3 votes
1 answer
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 ...
Francisco Daniel Quiroz's user avatar
1 vote
1 answer
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 ...
Piranha's user avatar
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4 votes
1 answer
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 ...
dismal-audience's user avatar
5 votes
2 answers
1k views

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, $\...
Jayyu's user avatar
  • 173
5 votes
3 answers
739 views

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. ...
Lopez's user avatar
  • 205
4 votes
1 answer
184 views

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-...
anjikum's user avatar
  • 984
3 votes
2 answers
151 views

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 ...
MarcM's user avatar
  • 133
4 votes
1 answer
144 views

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 ...
Greedo's user avatar
  • 141
1 vote
1 answer
313 views

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 ...
user avatar
1 vote
1 answer
164 views

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,...
Mostafa's user avatar
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12 votes
4 answers
871 views

Recommendations for OM blogs

Could someone suggest good blogs to follow for researchers in Operations Management/ Supply Chain Management /Operations Research?
Sreekz's user avatar
  • 137
2 votes
0 answers
74 views

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 ...
Michael L Hamilton's user avatar
1 vote
1 answer
131 views

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 ...
jiji's user avatar
  • 19
2 votes
1 answer
129 views

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, ...
janicebaratheon's user avatar
5 votes
2 answers
664 views

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 ...
TTY's user avatar
  • 245
1 vote
0 answers
58 views

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 ...
martini-bonanza's user avatar
1 vote
3 answers
741 views

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 ...
TTY's user avatar
  • 245
2 votes
1 answer
152 views

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 ...
cmp's user avatar
  • 327
2 votes
2 answers
565 views

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 ...
cmp's user avatar
  • 327
2 votes
1 answer
414 views

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 $\...
Nishant Kumar Gupta's user avatar
5 votes
2 answers
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 ...
Nishant Kumar Gupta's user avatar
5 votes
1 answer
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 ...
Nishant Kumar Gupta's user avatar
8 votes
1 answer
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, $$...
Nishant Kumar Gupta's user avatar
4 votes
1 answer
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 ...
Nishant Kumar Gupta's user avatar
5 votes
2 answers
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 ...
leonsas's user avatar
  • 151
5 votes
1 answer
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-...
Nishant Kumar Gupta's user avatar
3 votes
2 answers
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 ...
Anon's user avatar
  • 149
0 votes
1 answer
253 views

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 ...
21vs's user avatar
  • 489
7 votes
1 answer
87 views

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 ...
farshid evazabadian's user avatar
8 votes
1 answer
298 views

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 ...
Benjamín J Barros G's user avatar