Target stock level

Suppose the target stock level is set as z. Then, as soon as a demand arrives, it is satisfied by an item taken from inventory. A job is then released to the machine or server to begin manufacturing or serving the replenishment. Mean service time of a job is i = 1/p. 

In base stock control there are target stock levels Zj set for the store j. If a demand occurs, information about the occurrence of the demand is immediately sent to each cell. On receipt of the information, a request for a part is sent to the input store, store j — 1. If no parts are available, then requests would queue until a part becomes available. Once the part is removed from store j — 1, it is then released to the production cell for processing. On completion of processing, the completed part is put in store j. Denote by Nfi) the number of parts released to the production cell j at time t and not yet completed, the number of requests for parts waiting at the input store j - 1, and... 

To assess relative under- and over-shooting of target stock levels, constraints (3.51) assign the deviations of the ratio from 1 to the variables ous and Uus- If Sits > it follows that - 1 > 0. Because ou, and uus are non-negative variables and both are associated to positive cost rates, the cost-minimal values for Ous and uu, satisfying (3.51) are obtained by Oits = - 1 and uus = 0. Otherwise, uus = jife - 1 and ous = 0. Finally,... 

For simplicity it is assumed that the chemicals consumption/production rates coits o,re constant over the planning horizon. Table 3.16 displays the assumed consumption/production rates uJis as well as stock capacities initial stocks and target stock levels... 

Table 3.16 Consumption rate u>ig, stock capacities initial stocks si , and target stock levels sj for all sites i and chemicals s...

Inventory costs are measured as the weighted sum of relative deviations from a target stock level. 

The charter rates cff are increasing non-linearly with increasing tanker size to reflect economies of scale for larger-sized tankers. Two tank types are used, k = 2 is an all-round tank that can be used for all chemicals, whereas type k= is specialized for chemical s = 2. The remaining cost rates are set as follows c ° = 10 and = 1 for all i e 2, v e V, and s S, respectively. Cost rates for over- and undershooting target stock levels are set as in example 6 = 1000 and c / = 1 for all ieX and s eS. This setting was solved to... 

Note that a re-configuration of the logistical system may lead to an improved logistical performance (e.g. faster cycle time) and may influence the determination of target stock levels. However, this effect is not investigated here. 

Periodic order quantity and target stock levels... 

A widely used model for inventory control in retailing is periodic review. This works by placing orders of variable size at regular intervals - the review period. The quantity ordered is enough to raise stock on hand plus stock on order to a target level called the target stock level (TSL) ... 

Order quantity = Target stock level - Stock on hand - Stock on order... 

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