Note: An application of the EOQ model with nonlinear holding cost to inventory management of perishables

Ferguson, Mark; Jayaraman, Vaidy; Souza, Gilvan C.

doi:10.1016/j.ejor.2006.04.031

Cited by 101 publications

(48 citation statements)

References 7 publications

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“…Luego se procede con el cálculo del modelo de EOQ. La aplicación consiste en observar los productos que representan mayor importancia para la distribuidora; estos productos son los de la clase A, los cuales representan una mayor demanda y mayor valor monetario [4,[10][11][12].…”

Section: Materiales Y Métodosunclassified

Modelo de inventarios para control económico de pedidos en empresa comercializadora de alimentos

Rodríguez

2015

rev.ing.univ.Medellin

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ResumenEn el estudio que originó este artículo se elaboró una propuesta de mejora del sistema de inventarios para una comercializadora de alimentos en la ciudad de Santa Marta, a fin de lograr una reducción en los costos de inventario y un incremento en el beneficio económico de la organización, mediante la planificación y control de las compras y ventas de los productos. El proceso aplicado consiste en la clasificación de los productos manejados por la empresa con el método ABC, de acuerdo con la importancia de cada producto en el total de ventas de la distribuidora; posteriormente se aplicó el modelo de Cantidad Económica de Pedido -EOQ-, con el fin de sistematizar los conteos periódicos en los productos guardados en bodega, establecer los registros de las ventas realizadas, determinar la cantidad óptima de pedidos y el momento justo en el cual se debe pedir mercancía a los proveedores y las cantidades mínimas de reorden. Inventory control model for economic order in food marketer AbstractIn this study a proposal to improve the inventory system for a distributor of food in the city of Santa Marta is made, in order to achieve a reduction in inventory costs and increased economic benefit of the organization, through planning and control of purchases and sales of products. The process used is the classification of the products handled by the company with the ABC method according to importance of each product in the total sales of the distributor; then the model of Economic Order Quantity applies -CEP the right time, in order to systematize the newspapers counts on products stored in the warehouse, establishing records of sales, determine the optimum amount of orders, in which to order merchandise suppliers and minimum reorder quantities.

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Section: Materiales Y Métodosunclassified

Modelo de inventarios para control económico de pedidos en empresa comercializadora de alimentos

Rodríguez

2015

rev.ing.univ.Medellin

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“…Weiss [14] charged a non-linear holding cost on EOQ models. A few years later, Ferguson, et al [15] applied this model to manage perishable inventories. Similarly, Fujiwara and Perera [16] viewed this problem from a utility perspective.…”

Section: Literature Reviewmentioning

confidence: 99%

Model of an Integrated Procurement-Production System for Food Products Incorporating Quality Loss during Storage Time

Fauza¹,

Amer²,

Lee³

2013

IJMMM

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Abstract-Research on procurement-production systems for deteriorating items has been done. The majority of studies assume that the perishable characteristics affect only the quantity of inventoried items. For food products, however, their quantity remains constant during their shelf life period, but the quality deteriorates over time. This paper proposes a new procurement-production model incorporating this situation. The quality change behavior of food products is approached differently depending on their forms either as raw materials or finished goods. As raw materials, the kinetic model is used to represent the quality degradation during storage time, while as finished goods the shelf-life dependent pricing is utilized to describe the value loss due to the quality perception of customers. A mathematical model representing the integrated procurement-production of raw materials and finished goods at a manufacturer is established in this research. The objective is to maximize the total profit per unit time of the system by controlling a number of variables, namely the production cycle (T), the number of raw materials' procurement over one production cycle (m) and the number of finished goods delivery over one production cycle (n).Index Terms-Deteriorating items, food inventory, procurement-production system, quality loss, value loss. I. INTRODUCTIONEver since EOQ (Economic of Quantity) inventory control has been introduced, many researchers still develop it to solve various inventory problems. Conventionally, economic lot-size of raw materials was decided separately from finished product and this may lead to sub-optimization. It is because demand for raw materials depends on production schedule of finished products. Later, Goyal [1] developed an integrated inventory model for raw material and finished product. This research gave the first contribution in the field of integrated procurement-production (IPP) systems.Recently, research in the field of IPP system receives significant attention from scholars and many inventory models has been developed to accommodate this issue [2]. Goyal and Deshmukh [3] developed a model for IPP systems in just in time JIT environment to minimize set up time. And later, Lee [4] extend the IPP to an integrated supply chain problem by integrating the economic lot size of raw material, manufacturing set up and finished products. However, those studies assume that items can be stored infinitely, while in Manuscript received November 5, 2012; revised January 10, 2013. Gusti Fauza is with the School of Engineering, University of South Australia and Food Science and Technology Department, Sebelas Maret University, Indonesia (email: faugy001@mymail.unisa.edu.au).Yousef Amer and Sang Heon Lee are with the School of Engineering, University of South Australia. fact, some items have limited life time.In reality, it is often found that some particular items deteriorate over the storage period, for instance food products. For such items, the quality degradation during the storage time can lead ...

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“…Weiss (1982) noted that variable holding costs are suitable when the value of an item decreases the longer it is in stock. Ferguson et al (2007) indicated that this type of model is suitable for perishable items in which price markdowns or removal of aging product are necessary. Alfares (2007) also assumed an inventory model with discretely variable holding cost.…”

Section: Introductionmentioning

confidence: 99%

An optimization of an inventory model of decaying-lot depleted by declining market demand and extended with discretely variable holding costs

Tyagi¹

2013

10.5267/j.ijiec

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Inventory management is considered as major concerns of every organization. In inventory holding, many steps are taken by managers that result a cost involved in this row. This cost may not be constant in nature during time horizon in which perishable stock is held. To investigate on such a case, this study proposes an optimization of inventory model where items deteriorate in stock conditions. To generalize the decaying conditions based on location of warehouse and conditions of storing, the rate of deterioration follows the Weibull distribution function. The demand of fresh item is declining with time exponentially (because no item can always sustain top place in the list of consumers' choice practically e.g. FMCG). Shortages are allowed and backlogged, partially. Conditions for global optimality and uniqueness of the solutions are derived, separately. The results of some numerical instances are analyzed under various conditions.

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Note: An application of the EOQ model with nonlinear holding cost to inventory management of perishables

Cited by 101 publications

References 7 publications

Modelo de inventarios para control económico de pedidos en empresa comercializadora de alimentos

Modelo de inventarios para control económico de pedidos en empresa comercializadora de alimentos

Model of an Integrated Procurement-Production System for Food Products Incorporating Quality Loss during Storage Time

An optimization of an inventory model of decaying-lot depleted by declining market demand and extended with discretely variable holding costs

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