• Journal of Korean Institute of Industrial Engineers
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• v.30 no.3
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• pp.241-249
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• 2004

By committing to a long-term replenishment contract, suppliers can mitigate the pressure to find new customers and afford to charge a discounted price to buyers seeking to lower their purchasing costs. In this paper, we develop an analytical model from buyer's perspective for the contracting process to investigate the buyer-supplier interactions. Based on the developed model, we propose an algorithm to derive optimal strategy for the contract. We consider a system with a single buyer and a supplier in a situation where the buyer's inventory is controlled by (R, S) policy under VMI setting. According to the contract, the supplier should replenish the buyer's inventory up to a fixed level every R times during a specified period. The buyer purchases any deficient amount from a spot market at a higher price. We show by computational experiment that our proposed algorithm finds the global optimum solution.

• Journal of Korean Institute of Industrial Engineers
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• v.34 no.4
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• pp.398-407
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• 2008

We consider a product recovery system that a single product is stocked in order to meet a demand from customers who may return products after usage. This paper addresses a problem of when to release a procurement process to replenish serviceable inventory and how many new products to procure. The structure of the optimal procurement policy is examined and numerically identified as a monotonic threshold curve. A numerical procedure is presented to jointly find the optimal procurement order size, optimal procurement policy, and optimal discounted profit. Sensitivity analysis also indicates that these optimal performance measurements have monotonic properties with respect to system parameters.

• Korean Management Science Review
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• v.19 no.1
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• pp.107-116
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• 2002

A major challenge to supply chain managers is how to control inventories and costs along the supply chain while maximizing customer service Performance. In the literature, although the optimal management of inventory along the supply chain has received considerable attention during the past decades, the attention has been mainly given to multi-echelon control policies. A prerequisite for applying these policies is full information transparency in the supply chain, which is hard to accomplish in practice because it may require major organizational chanties. In the case that a decentralized control (local (R, S) policy) should be used at each location in multi-stave distribution systems, this paper presents the coordinating approach of determining the best policy which satisfies predetermined target customer service levels and minimizes the mean physical stock along the system.

• Korean Management Science Review
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• v.31 no.3
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• pp.13-26
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• 2014

This paper considers an integrated one-vendor multi-buyer production-inventory model where the vendor manufactures multiple products in lot at their associated finite production rates. In the model, it is allowed for each product to be shipped in lot to the buyers even before the whole product production is not completed yet. Each product lot is dispatched to the associated buyer in a number of shipments. The buyers consume their products at fixed rates. The objective is to the production and shipment schedules in the integrated system, which minimizes the total cost per unit time. The total cost consists of production setup cost, inventory holding cost and shipment cost. For the model, an iterative optimal solution procedure with shipment consolidation policy incorporated. It is then tested through numerical experiments to show how efficient and effective the shipment consolidation policy is.

• Proceedings of the Korea Society for Simulation Conference
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• 2003.06a
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• pp.129-134
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• 2003

In this paper, we determine optimal reduction in the lead time and setup cost for some stochastic inventory models. And we propose more general model that allow the backorder rate as a control variable. We first assume that the lead time demand follows a normal distribution. And we assume that the backorder rate is dependent on the length of lead time through the amount of shortages. The stochastic models analyzed in this paper are the classical continuous and periodic review policy models with a mixture of backorders and lost sales. For each of these models, we provide a sufficient conditions for the uniqueness of the optimal operating policy. We also develop algorithms for solving these models and provide illustrative numerical examples.

• Journal of the Korea Safety Management & Science
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• v.8 no.2
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• pp.115-128
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• 2006

The study analyzes those relations of customer service level of each sales branch, level of cooperations among branches, and overall system-wide service level for an item. Under the continuous review method, each sales branch places an order to the outside supplier, and the each branch receives the order quantity after elapsing a certain lead time. Under these circumstances, those branches with stockout condition may be supplied by other branches with keeping stocks to cover the shortages. This policy generally increases the system-wide customer service level for an item throughout cooperations for the safety plan among branches. Therefore, in the context of inventory policy, the decision rules to determine the proper branch levels of service and cooperation levels of service are important goals in terms of attaining desired system-wide service level. This research has suggested the method and procedure to reach above goals.

• Journal of the Korea Safety Management & Science
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• v.9 no.4
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• pp.121-127
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• 2007

CSP(Concurrent Spare Parts) is supplied with the procurement of new equipment or weapon system and is used to sustain the equipment without resupply during the initial coverage period. This study is concerned with a problem of determining the near optimal inventory level of the spare parts, especially Concurrent Spare Parts. For this, we utilize the mixed periodic and continuous review polices considering the CSP and (r,Q) Policies concurrently in a two-echelon distribution system. We propose the mathematical model to minimize the total cost which is composed with ordering cost, purchasing cost, holding cost, and stickout cost. If the mixed policy is compared to other policies(CSP, (r,Q)), the proposed methodology performs well and is best policy in the equipment maintenance expenses.

• International Journal of Advanced Culture Technology
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• v.3 no.2
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• pp.1-14
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• 2015

The purpose of this paper is to reveal two problems in the existing inventory systems in retail market, and to suggest a Two-Bin System under Automatic Ordering System considering only base-stock. Large retailers already have a sophisticated inventory system based on an automatic ordering principle. However, why does the out-of-stock (OOS) happen in large discount stores in spite of having a good inventory system? This paper suggests two systems after finding the root causes concerning the previous question. For evaluating the performance of each system, the random 200 data set in each sample group was generated from MINITAB 16 and obeyed the Poisson distribution. The existing inventory system in retail market cannot help generating OOS due to indwelling contradiction in itself. The reasons are the ordering deadline and the relationship between ordering quantity and base stock. This paper also demonstrates that these previous studies on inventory fall into the closed loop. Also the paper shows that the performance of the replenishment policy was better than traditional methods dealing with ordering quantity and base stock.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.35 no.4
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• pp.83-97
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• 2012

In this paper, we consider a single-manufacturer single-buyer supply chain problem where a single manufacturer purchases and processes raw materials into a family of items in order to deliver a family of items to a single buyer at a fixed interval of time for effective implementation of Just-In-Time Purchasing. An integrated multi-item lot-splitting model of facilitating multiple shipments in small lots between buyer and manufacturer is developed in a JIT Purchasing environment. Previous research on the integrated model assumed that the manufacturer orders raw materials m (integer) times for every production run (lot multiplier policy for the raw material). In this paper, we consider a generalized policy in the replenishment of raw materials, allowing lot multiplier policy and lot splitting policy. An iterative solution procedure is developed to find the order interval for finished goods and raw materials, and number of shipments between buyer and manufacturer. We show by numerical example that when the integrated policy is adopted by both buyer and manufacturer in a cooperative manner, both parties can benefit.

• Transportation Technology and Policy
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• v.8 no.6
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• pp.99-105
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• 2011