The Effect of Reducing Leadtime on Inventory Levels-Simulation Analysis

Gross, Donald; Soriano, Adria

doi:10.1287/mnsc.16.2.b61

Cited by 40 publications

(16 citation statements)

References 1 publication

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“…8 Also, research has found that for high service level re q u i rements, re d u c i n g lead time reduces expected inventory levels. 9 Thus, lead time effects were avoided by treating them as fixed.…”

Section: Methodsmentioning

confidence: 99%

Hospital Inventory Management for Emergency Demand

Duclos

1993

International Journal of Purchasing and Materials Management

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Inventory management is receiving increased emphasis in a variety of organizations. One important area is inventory that is subject to emergency demand situations. A hospital materials manager, for example, must establish efficient inventory system policies for normal operating conditions that also ensure the hospital's ability to meet emergency demand conditions. A simulation model of a hospital inventory system was developed to determine the relative significance of several common inventory system variations on a hospital's ability to operate successfully under normal and emergency demand conditions. Results of the simulation reveal that review frequency plays a major role in the success of operations under shock demand conditions. The simulation also suggests that generalizing from the results of an inventory system under normal conditions to expected results under shock conditions is inappropriate. Several common assumptions flowing from these generalizations were challenged by the results of the study.

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Section: Methodsmentioning

confidence: 99%

Hospital Inventory Management for Emergency Demand

Duclos

1993

International Journal of Purchasing and Materials Management

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“…For example, Gross (1969) evaluates change in inventory resulting from reduced mean lead time using simulation. Ebrahimpour (1985) uses simulation to investigate claims that Kanban systems result in less Work in Process inventory.…”

Section: Introductionmentioning

confidence: 99%

Reducing inventory cost for a medical device manufacturer using simulation

Cooper¹,

Sardar²,

Tew³

et al. 2013

2013 Winter Simulations Conference (WSC)

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Seeking to enter new geographic markets where expected margins are relatively tight, a manufacturer of medical devices must reduce inventory and related costs in its finished goods supply chain. The manufacturer's supply chain includes four echelons-factories, distribution centers, regional salespeople (also known as "vans"), and customers. The amount of inventory typically held and corresponding reorder policies near the customer end of this supply chain are not known. A simulation approach was selected to provide insight into those inventory levels based on assumed reorder policies. Analysis conducted using a simulation model implemented using SimPy point to significant potential savings, with the value of inventory-related savings over a four year period approaching $200 million.

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“…Most of the papers on LTR in the literatures focused on the relation between lead-time and stock level, such as Donald Gross [5], Tyworth et al [6], Glasserman et al [7], Chen et al [8], little is on effect on the expected profits of both supply chain parties. Iyer and Bergen (1997) [9] applied bayesian methodology to study how a manufacture-retailer channel impacts choice of production and marketing variables under QR (Quick Response) in the apparel industry, but the quantitative relations between lead time and expected profits and the effect of LTR on the s u p p l y c h a i n c h a n n e l a r e n ' t e m b e d d e d i n t o their works.…”

Section: Introductionmentioning

confidence: 99%

A Vendor-Buyer Stochastic Inventory Model with Lead Time Reduction in Supply Chain

Song

Ming

2006

2006 International Conference on Machine Learning and Cybernetics

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Time-based competition strategy embodies lead time reduction (LTR) at operational level in supply chain. When supply chain channel puts LTR into practice, there exist two questions: how LTR to effect on profit of supply chain actors and if LTR may not make both supply actors better off, how to coordinate the supply channel? A single shorter-life-cycle product model of the supplier-retailer decentralized decision-making supply chain is proposed in this paper. On the assumption that the mean demand is constant and the variance of the forecasted demand is in inverse proportion to lead time, the quantitative relations between lead time and profits of supply chain and supply chain actors are formulated.By logical analysis and numerical instance, we come to conclusions: (1) If service level is more than 0.5, LTR cannot make supply actors Pareto improvement; If service level is not more than 0.5, LTR makes both supplier and retailer better off. (2) When service level in supply chain is more than 0.5, a supply contract, linear transfer mechanism, is introduced to coordinate supply chain channel, and the contract can apportion at will profit increment under LTR in supply chain between supplier and retailer by tuning the contract parameters.

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The Effect of Reducing Leadtime on Inventory Levels-Simulation Analysis

Cited by 40 publications

References 1 publication

Hospital Inventory Management for Emergency Demand

Hospital Inventory Management for Emergency Demand

Reducing inventory cost for a medical device manufacturer using simulation

A Vendor-Buyer Stochastic Inventory Model with Lead Time Reduction in Supply Chain

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