High-demand products, inventory

The inventory tasks is to collect environmentally important information about relevant processes involved in the product system. Inventory collects information about unit processes at first and subsequently, an inventory of inputs and outputs of the system and its surroundings is carried out. The goal is the identification and quantification of all elementary flows associated with product system. Inventory analysis is the nature of the technical implementation of LCA studies. It is an essential part of a study, has high demands for data availability, practical experience in modelling product systems and, in the case of using database tools, it is necessary to master them perfectly and to understand their function [46]. The inventory phase principle is data collection that is used to quantify values of the elementary flows. This phase represents a major practical part of the LCA study, time consuming and with demands for data availability and author s experience with modelling product system studies [47],... 

The planner can indude the stock costs in addition to the other costs, but as a consequence delay costs are balanced with stock costs. Here this effect is not wanted at first high demand satisfaction is required. Keeping this to the maximum level, stock costs are lowered around this optimum. The trade off between production for future demands and inventory costs can be maximized by the so called shift operator. 

These planning tools determine the appropriate production, transportation, and inventory policies for a set of manufacturing plants, warehouses and retailers. Specifically, given manufacturing, warehouse and retailer locations, production, inventory and transportation costs and capacities, and demand forecasts for each retail outlet, the objective is to determine policies that achieve high levels of customer service with minimal cost. 

In the period from 1995 to 1998, the focus was on efficient operations. The company built products to forecast. The high-demand volatility drove up inventory levels. 

With low forecast accuracy and/or high demand variability, companies usually have to increase safety stock levels or transship products from one warehouse to another, on an expedite basis, when a warehouse is short of inventory, otherwise they will lose profit margin and become less competitive. However, these operational initiatives despite allowing companies to achieve the required service level, hurt operational efficiency and increase supply chain costs. 

Inventory—It is commonly used as a buffer to manage unpredictable supply and uncertain demand risks. However, inventory is expensive and may become a risk for high-tech products due to obsolescence. 

For example, the higher the demand variability and imcertainty, the greater the need for buffers. Buffers can be in the form of spare capacity, inventory and order lead times. If we want to shorten the time the customer has to wait, then it is necessary to make speculatively - perhaps finishing off (customising) the product once the final order details are known. Finally, planning and controlling the flow of materials across the supply chain needs to be carried out centrally when in high demand variability and uncertainty conditions in order to coordinate the response of supply partners. In more stable demand conditions, it is possible to relax controls and allow more local flexibility. 

Production lead times are shorter. This allows smaller pre-season inventories to be built up. Instead, high-demand items are supplemented by production during the season. The effect is to maintain high availability of popular lines while minimising stocks of items which prove to be less popular and which would otherwise have to be discounted. 

Build inventory of high-demand or predictable-demand products When most of the products a firm produces have the same peak demand season, the previous approach is not feasible. In such an environment, it is best for the firm to build products that have more predictable demand during the off-season, because there is less to be learned about their demand by waiting. Production of more uncertain items should take place closer to the selling season, when demand is more predictable. Consider a manufacturer of winter jackets that produces jackets both for retail sale and for the Boston police and fire departments. Demand for the Boston police and fire jackets is more predictable these jackets can be made in the off-season and stocked up until winter. The retail jackets demand, however, will likely be better known closer to the time when they are sold, because fashion trends can change quickly. Therefore, the manufacturer should produce the retail jackets close to the peak season, when demand is easier to predict. This strategy helps the supply chain synchronize supply and demand better. 

As the desired product availability goes up, the required safety inventory also increases because the supply chain must now be able to accommodate uncommonly high demand or uncommonly low supply. For the Walmart situation in Example 12-5, we evaluate the required safety inventory for varying levels of fill rate as shown in Table 12-1. 

Because actual demand for products is difficult to know upstream in supply chains, suppliers often carry high levels of inventory unnecessarily. Higher inventory levels are a direct result of closed lines of communication and lack of coordination causing upstream suppliers to use inaccurate and unsuitable data for planning. Even with open lines of communication and coordination, the information transmitted has to be accurate and portray what is occurring correctly. 

The problem of splitting the total production into lots or campaigns can be solved by a multiproduct extension of the old and well known Andler or Harris formula [7], which is for one product only. This extension copes with several products on the same production train and various side conditions, and minimizes the lot sizes. It can be shown that lot sizes should be proportional to the square-root of demand, as far as side conditions allow. The demand as well as the lot size can be measured in weight or value. It is important to realize that unnecessarily high lot sizes not only generate inventory cost but also negatively affect the production of more urgently needed products. 

Nevertheless the age-old problem of balancing will not go away. Chlorine cannot be stored so if demand falls there has to be a rate cut eventually or wholesale conversion of EDC back to the 3 cent per pound level. At the other extreme, caustic soda cannot be put into inventory for ever. Caustic soda at the 30 level implies high chlorine values, which implies better use of the chlorine, especially where FICl is a co-product. Again, looking into the future, more isocyanate and epichlorohydrin units will be tagged on to the vinyl chain as is projected for China and Qatar in the twenty-first century. This ought to minimise the amount of co-product caustic produced (see Fig. 1.7). 

Due to high reflux demand separation plants can have inventories corresponding to many days of normal production. Equation (8.6) is an approximate relation for time to first production, tp. The behavior is similar to that for plant size, i.e. tp increases linearly with residence time per stage, h, but diverges toward infinite time proportionally to 1/(1 — a)2. 

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