Dr. Dinesh Seth
Manjit Pandey
Abstract
The dual objectives of maximizing customer service while minimizing inventory costs require close and frequent attention to the policies and models used for inventory management. The situation immediately catches attention if the profit margins with the products are very significant and at the same time demand fluctuations are high and random. The real life difficulties like variety and rhythm maintaining requirements in production setup with the fluctuations in supply chain amplify the problems further. The other factors like obsolescence, and constrained production capacity can further aggravate the problems. Therefore to achieve lean for addressing various wastes and to maintain flow, it is required to optimize the inventory by considering the cyclic replenishments done after fixed time intervals. The paper offers a model that can be used for the cyclic replenishment based dispatch system by keeping the dispatch duration as the ceiling for safety stock cover in non dedicated production lines. It also suggests a simulation based framework to test the feasibility or validation of this proposition. Model assumes rhythm in the non dedicated production lines and makes use of forecasts for the planning. It also guides about appropriate inventory replenishment levels and tries to improve the flow in system
Keywords- Optimization, Stochastic demand, Inventory modeling, Replenishment period and levels, Rhythm, Lean.