• Journal of the Korean Operations Research and Management Science Society
• /
• v.38 no.2
• /
• pp.95-115
• /
• 2013

In traditional inventory models, purchase prices of raw materials are assumed to be fixed and have no effect on the optimal choice of inventory policies. However, when purchase prices fluctuate continuously over time, inventory costs are heavily affected by purchasing prices. Risk-averse inventory model decides order quantity and ordering time by considering not just purchase prices but also the risk from the discrepancy between estimated prices and realized prices. In this paper, we propose a myopic inventory policy which incorporates price risk into deciding ordering time and quantities. While the existing risk-averse model has no mechanism to reallocate inventories already purchased for a specific future period, the revised one reallocates initial inventories of each period to other future periods so that it can avoid purchasing raw materials at high prices. Experimental results demonstrate that the revised model outperforms the existing one in respect of total cost and variability.

• Journal of Global Scholars of Marketing Science
• /
• v.16 no.4
• /
• pp.1-11
• /
• 2006

Product quality of perishable food is significantly affected by the environment. Technological approaches for tracking and tracing such products have attracted increasing attentions in both research and practice. This paper studies how supermarket can maximize profits of selling perishable food through price adjustment based on real-ime product quality and values. This can be achieved by tracing the value of the perishable food based on an automatic product identification technology Radio Frequency Identification(RFID). With the support of the RFID, an optimization model can be developed to enable product tracking and tracing. The analysis of the model shows promising benefits of applying a dynamic pricing policy and obtains the optimal ordering decision in the respect of deterministic demand function.

• Industrial Engineering and Management Systems
• /
• v.7 no.3
• /
• pp.257-265
• /
• 2008

This paper deals with the joint decisions on pricing and ordering for a monopolistic retailer who sells perishable goods with a fixed lifetime or demand period. The newsvendor-typed problem is formulated as a two-period inventory system where the first period represents the inventory of fresh or new-arrival items and the second period represents the inventory of items that are older but still usable. Demand may be for either fresh items or for somewhat older items that exhibit physical decay or deterioration. The retailer is allowed to adjust the selling price of the deteriorated items in the second period, which stimulates demand and reduces excess season-end or stale inventory. This paper develops a stochastic dynamic programming model that solves the problem of preseason decisions on ordering-pricing and a within-season decision on markdown pricing. We also develop a fixed-price model as a benchmark against the dual-price dynamic model. To illustrate the effect of the dual-price policy on expected profit, we conduct a comparative study between the two models. Extension to a generalized multi-period model is also discussed.

• Proceedings of the Safety Management and Science Conference
• /
• 2002.05a
• /
• pp.237-241
• /
• 2002

This paper deals with the problem of determining the buyer's economic lot sizing policy for exponentially deteriorating products under trade credit. It is also assumed that the ordering cost consists of a fixed set-up cost and a freight cost, where the freight cost has a quantity discount offered due to the economies of scale. We formulate the mathematical model and the solution algorithm is developed based on the properties of an optimal solution.

• Journal of KIISE:Software and Applications
• /
• v.34 no.6
• /
• pp.572-583
• /
• 2007

This paper investigates Centering-based metrics to evaluate ordering of utterances for text structuring. We point out a problem of MIN.NOCB metric which has been regarded as the simplest and best measure to evaluate coherence of ordering within Centering framework, and propose a new Centering-based metric, MAX.CPS as an alternative or supplementary one. This paper introduces a framework which pre-estimates the effectiveness of a metric on a given input ordering, and selects an applicable metric according to the pre-estimation result. Using this framework, we propose a new policy which can generate more optimal ordering within Centering framework. Moreover, we evaluate several kinds of Cf-ranking methods in terms of Centering-based metrics, and find that simply ranking entities by their linear order is generally the most suitable because of characteristics in Korean.

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

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
• /
• v.9 no.2
• /
• pp.81-86
• /
• 2014

In this paper, a jointly optimal group replacement and spare provisioning policy is presented. Most maintenance policies assume that the spare inventory is always available, but in practice the maintenance schedule is affected by the availability of spare inventory. We present a maintenance-inventory model which jointly optimizes the group replacement interval and spare ordering quantity. Group replacement policy is used when a group of units are put in operation simultaneously. The operating fleet is replaced altogether at a predetermined number of units are failed. A sufficient level of spare inventory is carried to perform a number of group replacement. A cost rate expression which considers the group maintenance cost and inventory holding cost is derived and a heuristic method for searching the optimum value of decision variables is suggested. Numerical examples demonstrate the analytical results and the performance of the presented model.

• Journal of Korean Institute of Industrial Engineers
• /
• v.34 no.1
• /
• pp.32-41
• /
• 2008

This paper studies a joint EOQ and EPQ model in which a stationary demand can be satisfied by recycled products as well as newly purchased products. The model assumes that a fixed quantity of the used products are collected from customers and later recovered for reuse. The recovered products are regarded as perfectly new ones. We also assume that the number of orders for newly purchasing items and the number of recovery setups in a cycle can be mutually independent integers. Under these assumptions, we develop an optimization model obtaining the economic order quantity for newly procured products, the optimal lot size for the recovery process, and the sequence of the orders and the setups, simultaneously. And then a simple solution procedure to find a local optimal control parameter set is proposed. To validate the model and the solution procedure, finally, some computational experiments are presented.

• Journal of the Korea Society for Simulation
• /
• v.22 no.2
• /
• pp.41-51
• /
• 2013

Tendency for small changes in end-consumer demand to be amplified as one moves further up the supply chain is known as bullwhip effect (BE). BE is usually defined as variance(order)/variance(demand). Since such distorted information throughout the supply chain can lead to inefficiencies, many studies to reduce variance(order) have been performed. However, in this study, we show that minimization of BE may increase inefficiencies of the supply chain. We introduce a new objective function to increase system efficiency using smoothed ordering policies. Simulation optimization is utilized to find optimal smoothed ordering policies.

• Industrial Engineering and Management Systems
• /
• v.14 no.1
• /
• pp.1-10
• /
• 2015

In this paper, we consider multi-item inventory management. When managing a multi-item inventory, we coordinate replenishment orders of items supplied by the same supplier. The associated problem is called the joint replenishment problem (JRP). One often-used approach to the JRP is to apply a can-order policy. Under a can-order policy, some items are re-ordered when their inventory level drops to or below their re-order level, and any other item with an inventory level at or below its can-order level can be included in this order. In the present paper, we propose a method for finding the optimal parameter of a can-order policy, the can-order level, for each item in a lost-sales model. The main objectives in our model are minimizing the number of ordering, inventory, and shortage (i.e., lost-sales) respectively, compared with the conventional JRP, in which the objective is to minimize total cost. In order to solve this multi-objective optimization problem, we apply a genetic algorithm. In a numerical experiment using actual shipment data, we simulate the proposed model and compare the results with those of other methods.