A simulation approach to manage finished goods inventory replenishment economically in a mixed push/pull environment

Massimo Bertolini (Massimo Bertolini is a PhD Candidate at Dipartimento di Ingegneria Industriale, Università degli Studi di Parma, Parma, Italy.)
Antonio Rizzi (Antonio Rizzi is Professor in Logistics Management, at Dipartimento di Ingegneria Industriale, Università degli Studi di Parma, Parma, Italy.)

Logistics Information Management

ISSN: 0957-6053

Publication date: 1 October 2002

Abstract

In this paper we introduce a simulative model, designed and developed to optimally manage an integrated finished goods inventory system, and suitable for adoption in a wide range of make to stock manufacturing firms. The goal of the model is to manage optimally finished goods inventory levels, in order to minimize costs deriving from holding inventory and from adjustment to the master production schedule (MPS) to prevent stock‐outs. A trade off is sought between these costs components. The input variables of the model are: safety stock levels, assessed through coefficients k1, k2 and k3, and the stochastic distribution functions of products demand. The model performances are assessed considering the annual total cost for the inventory management. The model is then tested by a numerical application. The case considered refers to a major firm operating in the zootechnical feeds production industry.

Keywords

Citation

Bertolini, M. and Rizzi, A. (2002), "A simulation approach to manage finished goods inventory replenishment economically in a mixed push/pull environment", Logistics Information Management, Vol. 15 No. 4, pp. 281-293. https://doi.org/10.1108/09576050210436129

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Publisher

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MCB UP Ltd

Copyright © 2002, MCB UP Limited

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