Safety inventory case study

Another important feature of the case study scenario and the resulting cost model is inventory control. High seasonality effects and long campaign durations necessitate considerable build-up of stocks. To avoid an unbalanced build-up of stock, soft constraints for safety stock and maximum stock levels are used. To achieve an even better inventory leveling across products and locations, piece-wise linear cost functions for falling below safety stock as well as for exceeding maximum stock levels are employed. 

The case study on Vinyl Acetate Process, developed in Chapter 10, demonstrates the benefit of solving a process design and plantwide control problem based on the analysis of the reactor/separation/recycles structure. In particular, it is demonstrated that the dynamic behavior of the chemical reactor and the recycle policy depend on the mechanism of the catalytic process, as well as on the safety constraints. Because low per pass conversion of both ethylene and acetic acid is needed, the temperature profile in the chemical reactor becomes the most important means for manipulating the reaction rate and hence ensuring the plant flexibility. The inventory of reactants is adapted accordingly by fresh reactant make-up directly in recycles. 

In this study there are six non-parameterised strategies which are applied and evaluated in the SC model using simulation, including (1) JIT (lot-for-lot) (2) JIT (lot-for-lot) with safety stock (3) Kanban (fixed WIP) (4) Kanban (fixed WIP) + safety stock (5) VMl (based-stock policy) and (6) VMl (based-stock policy) with safety stock. The case company B s original strategy will also be evaluated and used as a base reference point. There are two fixed safety stock levels 20% and 30%. The reason for their choice is based on the consideration of inventory capacity, the raw material product cycle time and the financial flow information (from the interview discussions). 

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