• Journal of the Korean Operations Research and Management Science Society
• /
• v.30 no.4
• /
• pp.71-81
• /
• 2005

This Paper focuses on the effects of outside competition on an optimal echelon base stock level in a two stage supply chain. This is new in that we have been studying the effects of inside competition within a supply chain up to now. It is known that the optimal echelon base stock level with inside competition within a supply chain is less than the global optimal echelon base stock level without inside competition. This is due to the ' public goods ' nature of inventory. That is, more inventory is better, but one wants the other to invest more, thus resulting in under-investment. However, this phenomenon becomes weaker as outside competition increases. We show that as outside competition becomes stronger, the ' public goods ' effects decrease and the optimal echelon base stock level increases. If the level of competition is sufficiently high, the optimal echelon base stock level goes even higher than the global optimal echelon base stock level. We develop a theoretical model for the analysis and conduct a numerical analysis.

• Journal of Korean Institute of Industrial Engineers
• /
• v.1 no.1
• /
• pp.41-56
• /
• 1975

In the past the pattern of business down-trend usually appeared in the form of, first, decrease in facility investment, then decrease in inventory level, followed by reduced level of consumption. But the pattern nowadays is becoming just the opposite, that is, first, consumption decrease, then inventory level increase, followed by restriction of facility investment. Also in the past, the greater effort was placed in strengthening of hardware areas through optimization and modernization of production means on the premise of sales. But lately software areas take most of the main effort to establish production mean with sales as its objective. Under these circumstances one of the real problems facing production activities today is the conflicting relationship between sales and production functions. This occurs due to differences of their view points. Then, in order to achieve maximum profit at the least cost, which is the ultimate objective of a production activity, the need arises to effectively coordinate sales demand and plant production capacity. For this purpose strong control means and function must be devised. In our case study example we illustrate a management technique for a combined planning function, of optimal coordination of product mixes utilizing a computerized linear programming model as control means of attaining maximum profit. It is hoped that this example help achieve some of corporate objectives.

• Journal of Institute of Control, Robotics and Systems
• /
• v.19 no.6
• /
• pp.563-568
• /
• 2013

The purpose of this study is to find the analytic solution for determining the optimal capacity (lot-size) of a batch-storage network to meet the finished product demand under infrequent shutdowns. Batch processes are bound to experience random but infrequent operating time losses. Two common remedies for these failures are duplicating another process or increasing the process and storage capacity, both of which are very costly in modern manufacturing systems. An optimization model minimizing the total cost composed of setup and inventory holding costs as well as the capital costs of constructing processes and storage units is pursued with the framework of a batch-storage network of which flows are susceptible to infrequent shutdowns. The superstructure of the plant consists of a network of serially and/or parallel interlinked batch processes and storage units. The processes transform a set of feedstock materials into another set of products with constant conversion factors.A novel production and inventory analysis method, the PSW (Periodic Square Wave) model, is applied. The advantage of the PSW model stems from the fact it provides a set of simple analytic solutions in spite of a realistic description of the material flow between processes and storage units. The resulting simple analytic solution can greatly enhance a proper and quick investment decision at the early plant design stagewhen confronted with diverse economic situations.

• Journal of Korea Port Economic Association
• /
• v.26 no.3
• /
• pp.42-55
• /
• 2010

This paper primarily deals with a decision-making for determining the number of voyages in each ship size under a specific port structure in order to minimize the total transport cost consisting of transport cost at sea, queuing cost in port, and inventory cost in yard. As a result of computer simulation using queuing model characterized by inter-arrival time distribution, we were able to find out some combination of voyage numbers of 3 ship-size(50,000-ton, 100,000-ton, and 200,000-ton), where the total transport cost can be minimized under a specific port structure. The simulation model also allows us to figure out any trade-off relationship among sea transport cost, queuing cost in port, and inventory cost in yard. Put it differently, an attempt to reduce the sea transport cost by increasing the number of voyages of the largest ship size, the transport cost incurred in both port and yard is hypothesized to be increased and vice versa. Consequently, Port managers are required to adjust the number of annual number of voyages allocated in each ship size, put into the sea lines for importing raw materials, in order to optimize the transport costs incurred under the specific port system. We may consider a net present value(NPV) model for performing an economic feasibility analysis on port investment project. If a total discounted net benefit, including cost savings, exceeds the initial investment for an additional berth construction, then we accept the port investment project. Otherwise, we reject the proposed port investment plan.

• The Journal of the Convergence on Culture Technology
• /
• v.8 no.5
• /
• pp.577-582
• /
• 2022

Credit transactions are used as a means of price discrimination from competitors in order for suppliers to increase customer demand. In particular, in the case of a two-stage supply chain consisting of a supplier, a retailer, and a customer, the deferral of payment for goods allowed by the supplier is a means of reducing the inventory investment cost of the retailer. Retailers have the opportunity to discount the selling price while anticipating an increase in end-customer demand through the reduction of the inventory investment cost. In view of the fact that such trade credit is provided for the purpose of increasing demand as a means of discrimination from competitors, it may be more general that the credit transaction period is allowed flexibly according to the transaction volume. In particular, in the case of deteriorating products, the credit transaction period given according to the order volume is a factor that increases the order volume of the retailer, but product deterioration can be a limiting factor in the increase in the order volume. The deterioration rate actually plays an important role in determining the inventory policy of the retailer. Therefore, in this paper, the effect of such deterioration rate on the inventory policy of retailer is analyzed.

• Journal of Korean Institute of Industrial Engineers
• /
• v.24 no.1
• /
• pp.137-144
• /
• 1998

Block stacking, which involves the storage of unit loads in stacks within storage rows, is typically used in traditional warehouses to achieve a high space utilization at a low investment cost. In this paper, assuming that the demand size from a customer is an i.i.d. random variable, we develop a probabilistic block stacking storage model and its algorithm for a singles product, which minimizes the time-overage floor space requirement under an (s, S) inventory policy and the violation of the FIFO lot rotation rule only in a single partially-occupied row.

• Journal of the Korean Operations Research and Management Science Society
• /
• v.25 no.3
• /
• pp.49-64
• /
• 2000

A vendor supplies a product to a sole/major buyer on a lot-for-lot basis under deterministic inventory control conditions. The basic premise is that the setup cost reduction technologies are available to both the buyer and the vendor, and that the vendor's inventory and setup reduction investment costs differ from the buyer's. Therefore, an individually designed ordering and setup cost reduction policy will likely cause mismatches between the vendor's and the buyer's optimal cycle times. For this situation, we show that a joint optimal setup cost reduction and ordering policy, together with an appropriate side payment(quantity discount or premium price) schedule, can be designed in a spirit in a spirit of coordination to eliminate mismatches in individual optimal cycle times.

• Journal of the Korean Operations Research and Management Science Society
• /
• v.34 no.1
• /
• pp.11-28
• /
• 2009

Intelligent investment in setup cost reduction and process reliability improvement is crucial to an emerging integrated lean six sigma practice today. This study examines a cost-minimizing problem of jointly determining production lot size, setup cost reduction, and process reliability improvement decisions for a manufacturer with an imperfect production process. We develop models for previously untapped discrete shipping in a supply chain context as well as continuous shipping and solve them optimally using differential calculus and nonlinear programming. We also conduct analytic and numerical sensitivity analyses to provide various important managerial insights into practices.

• Journal of the Korean Operations Research and Management Science Society
• /
• v.21 no.2
• /
• pp.17-33
• /
• 1996

Automatic transfer defined as an integrated system with a number of workstations, interstation storage buffers, automatic device and a control system, play a major role in ass production systems. Due to high capital investment needed for an automatic transferline, greater care should be taken in its design so as to maximize the system performance. One may to control the system performance is to control buffer storage. To control the interstation work-in-process inventory, we propose dual limit switches which control the buffer storage with two parameters, R and r. Under the policy, proceding station is forced down when the inventory level in the buffer reaches R until the level falls to r. For the model developed, we analyze the system characteristics and find the optimal control parameters with a serach procedure.

• Journal of Forest and Environmental Science
• /
• v.24 no.3
• /
• pp.119-126
• /
• 2008

Growth and yield prediction methods, ranging from whole-stand models to individual-tree models, have been developed for forest types managed for wood production. The resultant models are used for a host of purposes including inventory updating, management planning, evaluation of silvicultural alternatives, and harvest scheduling. Because of the large investment in developing growth and yield models for improved genotypes and silvicultural practices for loblolly pine (Pinus taeda) in the Southern United States, this region serves to illustrate approaches for modelling intensively managed forests. Analytical methods and computing power generally do not restrict development of reliable growth and yield models. However, long-term empirical observations on stand development, which are time consuming and expensive to obtain, often limit modelling efforts. Given that growth and yield models are used to project present volumes and to evaluate alternative treatment effects, data of both the inventory type and the experimental type are needed. Data for developing stand simulators for loblolly pine plantations have been obtained from a combination of permanent plots in operational forest stands and silvicultural experiments; these data collection efforts are described and summarized. Modelling is essential for integrating and synthesizing diverse information, identifying knowledge gaps, and making informed decisions. The questions being posed today are more complex than in the past, thus further accentuating the need for comprehensive models for stand development.