• Journal of Korean Society of Industrial and Systems Engineering
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• v.40 no.4
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• pp.105-111
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• 2017

Vendor Managed Inventory is a well-known vendor-retailer coordination approach in supply chain management where the vendor manages inventory of the retailer and determines the order interval and order quantity for the retailer. To consider practical situation, the upper limit of inventory for the retailer is set. If the inventory level for the retailer exceeds the upper limit, then the penalty cost is charged to the retailer. Furthermore, maximum allowable inventory level is set for the vendor to prevent the vendor from keeping much inventory. Single-vendor multi-retailer supply chain model with upper limit of inventory for vendor and retailers is studied. All the retailers' are assumed to have the common cycle time, and a vendor manages retailers' inventory and replenishes products. The mathematical formulation is introduced to minimize the total cost including the penalty cost violating the upper limit of inventory for retailers with the constraint of maximum allowable inventory level. The solution procedure based on Karush-Kuhn-Tucker (KKT) conditions is derived. KKT conditions are often applied to find an optimal solution of nonlinear programming problem with constraints. An illustrative example is used to show the application of the proposed solution procedure. Furthermore, sensitivity analysis is done to find out the relationship between maximum allowable inventory level and other values such as order quantity, the number of shipment, vendor's cost, retailer's cost, and total cost. As maximum allowable inventory level decreases, the number of shipment decreases but total cost increases. Order quantity has the trend of decline and is affected by the number of shipment.

• Journal of the Korea Safety Management & Science
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• v.15 no.1
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• pp.217-229
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• 2013

As customers' demands for diversified small-quantity products have been increased, there have been great efforts for a firm to respond to customers' demands flexibly and minimize the cost of inventory at the same time. To achieve that goal, in SCM perspective, many firms have tried to control the inventory efficiently. We present an mathematical model to determine the near optimal (s, S) policy of the supply chain, composed of multi suppliers, a warehouse and multi retailers. (s, S) policy is to order the quantity up to target inventory level when inventory level falls below the reorder point. But it is difficult to analyze inventory level because it is varied with stochastic demand of customers. To reflect stochastic demand of customers in our model, we do the analyses in the following order. First, the analysis of inventory in retailers is done at the mathematical model that we present. Then, the analysis of demand pattern in a warehouse is performed as the inventory of a warehouse is much effected by retailers' order. After that, the analysis of inventory in a warehouse is followed. Finally, the integrated mathematical model is presented. It is not easy to get the solution of the mathematical model, because it includes many stochastic factors. Thus, we get the solutions after the stochastic demand is approximated, then they are verified by the simulations.

• Korean Management Science Review
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• v.31 no.2
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• pp.33-48
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• 2014

It is important to maintain on operational availability of aircraft during wartime. The KF-16 fighter, the backbone of the ROKAF (Republic Of Korea Air Force), has a single engine. Therefore, the engine has a critical influence on operational availability. The purpose of this study is to estimate optimal levels of spare part inventories concerning both engines and modules. That is provided by linear programming methods utilizing a developed meta-model. For drawing out the meta-model, we develop a simulation model which can consider wartime demands. In the previous study, $2^k$ factorial design method is used to check the influence of each independent variable. That method requires relatively many scenarios because every extreme value combination of independent variables should be checked. However, this study adopts NOLH (Nearly Orthogonal Latin Hypercube) as an experimental design. By adopting NOLH, this study increases not only efficiency but also accuracy. That is proven by comparing the validity of the developed meta-model on both experimental designs. This study also utilizes the OptQuest simulation tool in ARENA to derive the optimal level of spare stocks. By comparing the result of OptQuest to that of the developed meta-model, the validity of this study is secured.

• Industrial Engineering and Management Systems
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• v.6 no.1
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• pp.1-10
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• 2007

The objective of this study is to develop an optimal joint cost from the perspectives of both the manufacturer and the retailer. The integrated production-inventory model with Weibull distribution deteriorating items is assumed to have a constant demand rate. A limited retailer storage space and multiple delivery per order are considered in this model. A numerical example including the sensitivity analysis is given to validate the results of the production-inventory model.

• Journal of the Korea Safety Management & Science
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• v.16 no.4
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• pp.323-330
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• 2014

Various inventory control theories have tried to modelling and analyzing supply chains by using quantitative methods and characterization of optimal control policies. However, despite of various efforts in this research filed, the existing models cannot afford to be applied to the realistic problems. The most unrealistic assumption for these models is customer demand. Most of previous researches assume that the customer demand is stationary with a known distribution, whereas, in reality, the customer demand is not known a priori and changes over time. In this paper, we propose a reinforcement learning based adaptive echelon base-stock inventory control policy for a multi-stage, serial supply chain with non-stationary customer demand under the service level constraint. Using various simulation experiments, we prove that the proposed inventory control policy can meet the target service level quite well under various experimental environments.

• Journal of the Korea Society of Computer and Information
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• v.20 no.1
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• pp.163-173
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• 2015

In this paper, it shows optimal inventory level of bicycle sharing service terminal by maintaining the lowest costs. As the interest to environment and exhaustion of resource increases globally, investment to sustainable transportation increases around advanced countries and interest to efficient transportation, managing and consuming of vehicle increases also. Vehicle sharing service is a model of rental car where customer rent cars for short periods of time often by the hour and its users are increasing for the reason that it is more convenient than car rent. In addition, bicycle sharing service is one of the major parts in vehicle sharing program and many of country are already managing it. This paper proposes optimal inventory levels of vehicle sharing service's terminal by using simulation calculating operation costs of vehicle sharing service.

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

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2002.05a
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• pp.378-384
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• 2002

In this paper, we propose a mixed integer optimization approach for solving the inventory problem with variable lead time, reorder point, crashing cost and price -quantity discount. Chang and Chang[15] study a continuous review inventory model in which lead time is a decision variable under price-quantity discount. However, their study cannot find the optimal solution due to the flaws in the modeling and the solution procedure. We present a complete procedure to find the optimal solution for the model. In addition to the above contribution, we also apply the minimax distribution free approach to the model to devise a practical procedure which can be used without specific information on demand distribution.

• Journal of the Korean Operations Research and Management Science Society
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• v.31 no.1
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• pp.25-36
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• 2006

Consider a supply chain in which a vendor supplies a product to a buyer. We assume that the buyer's and vendor's inventory cost structures are different, resulting in differences in inventory order/delivery cycle times. Here, if one party insists on its individually optimal order/delivery quantity, the other party will suffer from mismatches in cycle times. Under this scenario, coordination contracts that make use of either a Net Term/Two parts Term Trade Credit or a Quantity Discount are designed to align individually optimal order Quantities. We compare and analyze the perform ances of these contracts. The focus of the comparison is the ability of contracts to generate a lower cost for the supply chain. We show that a Trade Credit policy can be effectively used to coordinate a supply chain. In many cases it will result in a lower supply chain cost compared to that achieved by using a Quantitative Discount policy.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.35 no.1
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• pp.47-56
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• 2012

Service Parts Management is defined as a supply management associated with service parts from the part suppliers to the final customer. A series of process to improve the customer service level by forecasting the demand and to minimize cost by maintaining the inventory level is included. Uniqueness such as missing value correction, the data pattern analysis and planned order system is designed and implemented. Main feature of order management system is to calculate order amount and order time based on selection of optimal forecasting algorithm.