10

I agree with @QianZhang's answer (nice theoretical properties, easy to implement), and I would add that there is some theoretical justification too. If demands come from customer arrivals, then Poisson is a reasonable demand distribution since customer arrivals are well modeled by Poisson (often). And if the mean is large enough, then normal is a good ...


9

There are several models available to make the sort of decisions you are asking about. Most tend to make ordering decisions based on inventory level rather than on time: That is, they say things like "when the IL = 12, order 25" rather than "order 25 every 3 days". The newsvendor problem is usually interpreted as a periodic-review model, so if you're ...


9

In my understanding, using normal/Poisson distribution for customer demand is mainly for two reasons. These distributions have nice properties for theoretical analysis in supply chain models These distributions are easier to implement or already been implemented for computational concerns


8

I was wondering if there is any repository of datasets for supply chain problems? Global Garment Supply Chain Data - A collection of import data from various retailers - Last updated: October 19, 2013, 10:23 AM (UTC-07:00) [Note: The website Datahub has 11,591 other datasets.] USAID - Supply Chain Shipment Pricing Data This data set provides supply ...


7

√Čric Taillard publishes problem sets for flow shop, job shop and open shop scheduling (from one of his papers) at http://mistic.heig-vd.ch/taillard/problemes.dir/ordonnancement.dir/ordonnancement.html. Oleg Shylo publishes job shop problem sets from Demirkol et al., as well as best known solutions to both the Taillard and Demirkol problems, at http://...


7

According to a buddy of mine who was a faculty member in the area of purchasing / sourcing / procurement (they change their name every few years), "holding cost" and "carrying cost" are used pretty much interchangeably. They include costs to operate storage facilities, pilferage, spoilage, insurance and opportunity cost of capital tied up in inventory. He is ...


7

I agree that holding cost, carrying cost, and storage cost all sound like the same thing. The only thing I will add to the answer by @prubin is that often holding costs are expressed as a percentage of the value of the product. So, you might have a holding cost rate of $i=25\%$ and a product value of $c=200$, in which case the holding cost is $50$. Perhaps ...


5

I checked with a colleague who taught procurement / sourcing / purchasing / supply management / for quite a few years. He's skeptical about there being any heavily OR-oriented books in the field. That said, he mentioned "Better Business Decisions Using Cost Modeling, Second Edition", which he used (along with one or more other books) in an ...


4

In terms of the theory of buyback contracts (i.e., the math), it doesn't matter what the party doing the "buying back" (the manufacturer, in your question) does with the goods. They can resell them, dispose of them, rework them, etc. In fact, in practice, the other firm isn't always even required to physically send the units back, but only to provide ...


4

Per my friend the procurement guru, buyback contracts are apparently rare, whether between retailer and wholesaler or between wholesaler and manufacturer. In any case, the options for the party buying the inventory back are pretty much the same at any level: push it off on another customer (possibly at a discount); put it in inventory in hopes of future ...


4

Here's an approach that might be close to what you are looking for. Suppose that we have $n$ products, and for each product $i$ we know: $c_i$ = purchase cost per unit (i.e., cost to order inventory from the supplier) $\pi_i$ = profit margin per unit sold $f_i$, $F_i$ = probability distribution (pdf, cdf) of demand per period If there is only 1 product, ...


4

Question: Why do we normally assume normal distribution/Poisson distribution for customer demand in a supply chain? Answer : Based on my experience in the industry, I have seen that generally, business users use simple thumb rules-based methods for safety stock or inventory models. The next level of sophistication for these users is usage of Normal or ...


3

Theoretically it is quite naturally convincing to assume that demand time points are independent. In other words knowing that an item was bought in t1 does not give one any good clue in understanding next sales time t2. It is like process renews/regenerate itself after each event and hence time between events are independent of each other. This particular ...


3

The unit of each cost shows the nature of that type of cost. With that, I mean if you look through the units, you can easily figure out whether: The cost is fixed (it is independent of the inventory amount of products). For instance, the cost of operating a storage facility which does not depend on whether you store one unit of product or many units. The ...


2

If you are interested in supply chain management and its related processes, there are lots of textbooks which these concepts have been described in the mathematical form to illustrate and control the behaviour of the supply chain network (e.g. optimization models). Some of them are as follows: Planning Stability in Material Requirements Planning Systems ...


1

As a student I am doing research in this field, I found Wikipedia's explanation very useful. You are right, most of the applications of MDO are in the field of design for aerospace and mechanical engineering (they may design product, not systems). In these fields, the reconciliation of different teams in the design process completely follows well-known ...


1

If the newsvendor model is needed, the asset is assumed to have a short selling season and forward procurement is required. Usually, one-time procurement with fixed lead time is considered in newsvendor problems, so the primary concern is to decide the quantity. When there are multiple procurement opportunities, the dynamic procurement strategy can be ...


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