Optimal production policies for items with decreasing demand

Smith, Paul H.

doi:10.1016/0377-2217(77)90045-5

Cited by 20 publications

(5 citation statements)

References 2 publications

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“…The case of setting a demand profile to zero will occur when items have high stock levels with low demand or those with no recent demand. There are variations and analysis of exponential methods initially by presented by Ghare and Schrader (1963) that can be found in early literature by Smith (1977), Hollier and Mak (1983), Cheng (1989), Dave (1991) and then again by Hill, Omar and Smith (1999). Likewise there are linear methods presented in Donaldson (1977), and Brosseau (1982).…”

Section: Assessing Changes To Demand and Supply Behaviourmentioning

confidence: 99%

Logistics management issues for military systems approaching the end of service life

2015

Weber, T., McPhee, M.J. And Anderssen, R.S. (Eds) MODSIM2015, 21st International Congress on Modelling and Simulation

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Many concepts and models have been proposed and implemented to support the logistics management of physical assets through their service life. These concepts and models generally focus on a 'steady state' or 'mature' phase of the idealised asset life-cycle, and as such make a number of appropriate simplifying assumptions. As an asset approaches the end of its service life many of these assumptions become questionable and new logistics and fleet management issues begin to arise which potentially require the consideration of new concepts and models. A military system fleet approaching the end of its service life will continue to need ongoing support, which potentially includes support in operations. For this, fleet managers need to continue to invest in inventory to meet preparedness requirements and address potential obsolescence, phase out demand and discontinued supply issues; despite the fact that the fleet has a looming end of service life date. However, the desire not to over invest in inventory as an asset approaches the end of service life is balancing against these needs, as this can tie up financial resources and potentially add to labour, warehousing, transport and eventual asset disposal costs. These matters create tensions between effectiveness and efficiency considerations as system fleets reach the end of their service life. Past experience often suggest these issues are a secondary consideration in fleet management. This paper will explore a range of end of service life logistic issues including approaches to the inventory management functions of requirements determination, and replenishment planning. We will consider some standard approaches to these functions and highlight how end of service life considerations may require new management heuristics and process models. In particular, we investigate efforts to integrate a spare parts management (SPM) phase out strategy. This includes seeking a process for developing options, and goal setting the final state of the spare parts inventory at the asset's end of life date. This can then modify demand forecasting selection processes and calculations for replenishment actions. Importantly, inventory segmentation can play a role to determine how to treat various asset spare parts based on factors such as supply characteristics, demand, cost, stock on hand and relationships to other parts of the asset sustainment system. How these factors can be integrated into a management model for decision policy is a focus of our discussion. We then present a management process model to indicate which replenishment actions suit particular items in the inventory based upon phase out segmentation analysis and a desired end of service state. In doing so, a number of key end-of-service life policy options can be proposed. This can aid military planners to oversee inventory management of assets that are approaching end of life.

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Section: Assessing Changes To Demand and Supply Behaviourmentioning

confidence: 99%

Logistics management issues for military systems approaching the end of service life

2015

Weber, T., McPhee, M.J. And Anderssen, R.S. (Eds) MODSIM2015, 21st International Congress on Modelling and Simulation

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“…In this study we applied the multiplicative decomposition model because it has been found to be useful when modeling time series that display increasing or decreasing seasonal variation [19,20]. The key assumption observed in this model is that seasonality can be separated from other components of the series.…”

Section: Figure 1 Time Series Forecasting and Managerial Decision Mak...mentioning

confidence: 99%

Modified Trend and Seasonal Time Series Analysis for Operations: A Case Study of Soft Drink Production

Godwin

Okafor

2012

JERA

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Many Production and Business Time Series Are Non-Stationary Time Series that Contain Trend and Seasonal Variations. Seasonality Is a Periodic and Recurrent Pattern Caused by Factors such as Weather, Holidays, or Repeating Promotions. this Paper Presents a Trend and Seasonal Time Series Analysis of Soft Drink Production over the Period 2003–2010, it Is Necessary to Know the Trend in Soft Drink Production to Elicit the Reasons why Demand of Soft Drink Is Increased or Decreased at Specific Periods. the Objectives of this Paper Are (i) to Study the Trends in the Production and Productivity of a Soft Drink Bottling Company, and (ii) Analyze the Demand of the Firm with a View to Identifying Trend that Exists in the Company Using Time Series Analysis. A Software Program Was Developed Based on Applicable Methodology to Facilitate Accurate and Faster Analysis of Data. Characterization of Demand Data Using Decomposition Was Done, which Reveal the Nature of Seasonality, Cyclical Activity, Trend and Noise. on the Whole, the Results of the Decomposition Analysis Clearly Show that there Is a Remarkable Linear Trend in Demand Pattern. the Study of Seasonality Shows that the Highest Peak in Demand of the Product Occurred at 12th, 24th, 36th, 48th 60th, 72nd, 84th and 96th Months which Turn Out to Coincide with Yuletide. the Study Further Indicated a Positively Increasing Trend in the Demand Rate of Company’s Product.

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“…On the other hand, Ghare and Schrader (1963) made the first attempt to describe optimal policies for deteriorating items. Combining both Smith (1976) and Ghare and Schrader (1963), Hollier and Mak (1983) develop an inventory system in which the units are deteriorating at a constant rate and the demand rate decreases negative exponentially. Aggarwal and Bahari-Kashani (991) and Hariga and Benkherouf (1994) extend Hollier and Mak's model to a production-inventory system and the case of exponentially growing market respectively.…”

Section: Introductionmentioning

confidence: 99%

“…Smith (1976) relaxes the assumption of constant demand rate and employs dynamic programming to determine optimal replenishment policies for the case of a declining trend in demand. On the other hand, Ghare and Schrader (1963) made the first attempt to describe optimal policies for deteriorating items.…”

Section: Introductionmentioning

confidence: 99%

A solution procedure to determine inventory replenishment policies for deteriorating items in a declining market

Chung

Tsai

1999

Journal of Information and Optimization Sciences

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In 1995, Wee presented a deterministic lot size inventory model for deteriorating items with shortages and a declining market. In Wee's paper, the method of Newton is applied to the derivative ofthe total cost function to get the optimal solution. First, this paper reveals that the method of Newton does not necessarily converge to the optimal solution with an arbitrary initial point. Second, this paper proposes a modification to improve the solution procedure of Wee such that the method of Newton converges to the optimal solution independent of the choice of the initial point. Numerical examples demonstrate that the solution procedure in this paper is rather accurate and rapid.

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Optimal production policies for items with decreasing demand

Cited by 20 publications

References 2 publications

Logistics management issues for military systems approaching the end of service life

Logistics management issues for military systems approaching the end of service life

Modified Trend and Seasonal Time Series Analysis for Operations: A Case Study of Soft Drink Production

A solution procedure to determine inventory replenishment policies for deteriorating items in a declining market

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