Inventory control. (Q2493146)

The aim of this book is to explain fundamental ideas in inventory modelling in a simple but rigorous manner. Since the book assumes a good basic knowledge of mathematics and probability theory, this work is most suitable for industrial engineering and management science / operations research students. Another purpose of this book is to describe efficient inventory control techniques for practitioners, who can use it with as a textbook and a handbook when implementing and adjusting inventory control systems. The models and the methods within this book are based on the cost structure that is most common in industrial applications. Holding costs including opportunity costs of alternative investments, ordering or setup costs, and shortage costs or service level constraints are considered. The interaction with production is recognized through setup costs but also in some models by explicit capacity constraints. Another relevant aspect is that the basic conditions for the inventory control in the considered models are given, in general, in the form of demand distributions, load-times, service-requirements, and holding and ordering costs. In practice, most of these conditions can be changed at least in the long run. This is why many important questions concerning inventories are related to the structure and organization of the inventory control models and systems considered in this book. A specially valuable feature of this textbook is that it covers several new topics of interest such as alternative forecasting techniques, different stochastic demand processes and how they can be fitted to empirical data, generalized treatment of single-echelon periodic review systems, capacity constrained lot sizing, lateral transshipments and remanufacturing, coordination and contracts. A brief outline of the eleven chapter contents is the following: Chapter 2 (Forecasting) considers different forecasting techniques, concentrating on methods like exponential smoothing and moving average procedures for estimating the future demand from historical demand data. Techniques for evaluating the size of forecast errors are also provided. For the first edition (2002) see Zbl 1106.90006. Chapters 3--6 deal with basic inventory problems for a single installation and items that can be handled independently. More precisely, Chapter 3 (Costs and Concepts) presents the basic notions and notations, Chapter 4 (Single-Echelon Systems: Deterministic Lot Sizing) describes algorithms and heuristics for deterministic lot sizing, while Chapter 5 (Single-Echelon Systems: Reorder Points) analyzes safety stocks and reorder points. Chapter 6 (Single-Echelon Systems: Integration-Optimality) discusses integration and optimality of ordering policies. The contents of Chapters 2--6 provide the foundation for an efficient standard inventory control system, viz. (a) A forecasting module, which periodically updates demand forecasts and evaluates forecast errors; (b) A module for determination of reorder points and order quantities; (c) Continuous or periodic monitoring of inventory levels and outstanding orders, triggering of suggested orders when reaching the reorder points. In Chapter 7 (Coordinated Ordering), the assumption of independent items is abandoned, and coordinated replenishments are considered. Both production smoothing models and joint replenishment problems are analyzed. Chapter 8--10 focus on multi-echelon inventory systems, i.e. on several installations which are coupled to each other. The installations can represent, e.g. stocks of raw materials, components, work-in-process, final products in a production system, or a central warehouse and a number of retailers in a distribution system. Chapter 8 (Multi-Echelon Systems: Structures and Ordering Policies) considers inventory systems in distribution and production, Chapter 9 (Multi-Echelon Systems: Lot Sizing) deals with identical order quantities, constant demand, and time-varying demand for lot sizing, while Chapter 10 (Multi Echelon Systems: Reorder Points) describes methods for determining safety stocks and reorder points in multi-echelon inventory systems, assuming that the batch quantities are given. The final Chapter 11 (Implementation) discusses various practical problems related to implementing inventory control systems.