Inventory level strategy

In another setting, the human players are provided with global information about the system. This means that all players are informed about inventory levels and orders placed for each of the components of the supply chain. Furthermore, they are encouraged to work out co-operative strategies to deal with the dynamics of the system. Compared to the local information structure, this usually results in lower inventory levels and less out-of-stock-situations for all participants. Typically, the stocks and the number of orders in this setting are much lower, resulting in much lower costs for operating the supply chain and lower costs for each player as well. 

Strategy design is the right moment to trade off conflict goals between different functional areas (e.g., manufacturing efficiency and inventory level, procurement lot size and inventory level, etc.). 

In the second paper, Thomas considers a related problem but incorporates a general stochastic demand function and backlogging of excess demand. Specifically, Thomas considers a periodic review, finite horizon model with a fixed ordering cost and stochastic, price-dependent demand. The paper postulates a simple policy, referred to by Thomas as (5,5,p), which can be described as follows. The inventory strategy is an (5, S) policy If the inventory level at the beginning of period t is below the reorder point, st, an order is placed to raise the inventory level to the order-up-to level, St. Otherwise, no order is placed. Price depends on the initial inventory level at the beginning of the period. Thomas provides a counterexample which shows that when price is restricted to a discrete set this policy may fail to be optimal. Thomas goes on to say ... 

In case of the additive demand model, Chen and Simchi-Levi prove that the (s,5,p) policy identified by Thomas is indeed optimal. On the other hand, for the general demand model, they show that a different policy, referred to as an (5, S, A, p) policy is optimal policy. In such a policy, the optimal inventory strategy is characterized by two parameters st and St and a set At C [st st + St)/2], possibly empty. When the inventory level, xt at the beginning of period t is less than st or if xt E At an order of size St — Xt is made. Otherwise, no order is placed. Thus, it is possible that an order will be placed when the inventory level xt E [st, (st 4- St)/2], depending on the problem instance. On the other hand, if xt > (st + St)/2 no order is placed. Price depends on the initial inventory level at the beginning of the period. 

In general, this decision entails a determination of the number of levels in the distribution network, the number of outlets within each level, and other variables such as pricing, inventory levels, service levels, etc. The traditional marketing literature refers to these as distribution strategy, distribution intensity, and distribution management, respectively (Corstjens and Doyle 1979). 

Frequent review and adjustments of inventory targets Digital Linkages using XML standards (RosettaNet, eBXML, OAGI) to automatically query inventory levels l-Customer segmentation and supply chain strategy 0... 

There are two inventory control strategies that can be used for this system. The first inventory control strategy (Inventory Strategy 1) uses entrainer makeup flow to control the organic phase level in the decanter. This inventory control strategy was successfully used in Chien... 

This inventory management policy is a type of fixed WIP policy. Under this strategy, the production decisions are made based upon the received domestic and international customer orders minus the finished goods on-hand inventory levels (both domestic and international inventory) at each period. The raw material procurement decisions are made based on the production plan and the raw material on-hand inventory at each period. In this strategy, not only customer order information, but also the on-hand inventory information of finished goods and raw materials are considered. In the system, the strategy has been represented as ... 

Under PS(M)-JIT strategy, for raw material ordering, only the raw material on-hand inventory level information is considered. Therefore, if the raw material on-hand inventory level is smaller than s, the company starts to place an order for raw materials. The order quantity equals Sj minus the on-hand inventory level. For the production... 

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