1 AIT Asian Institute of Technology

Production and inventory control with stochastic lead times and stochastic demand

AuthorSedarage, Dayani
Call NumberAIT Diss. no.ISE-96-01
Subject(s)Inventory control
Stochastic systems

NoteA dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Engineerin, School of Advanced Technologies
PublisherAsian Institute of Technology
Series StatementDissertation ; no. ISE-96-01
AbstractThis study deals with inventory control policies for multi-part assembly systems and inventory system with stochastic lead times, which includes the following two specific systems: I - Determining an ordering policy for multi-part assembly systems. II- Determining an ordering policy for multi- vendor inventory systems. In part I, a multi-part, single product, assembly system of the following features is considered: part procurement lead times are random; the assembly production is instantaneous, carried out intermittently, and can only start after all the parts are available; demand process for the assembled product is at a constant rate. Furthermore, it is assumed that when an order for a part is placed, it is placed with a quantity exactly sufficient for one assembly run. We consider simultaneously lot sizing and part procurement order timing by adopting a (Q,r) type ordering policy by minimizing the expected total system cost per unit time consisting of setup cost, part holding cost, product holding cost and shortage cost. A tailor-made decomposition solution procedure for this problem to obtain a global optimal solution is developed by taking advantages of the special structure of the problem formulation. The model is then extended to consider that the demand process is a renewal process; the part procurement lot sizes are integer multiples of assembly lot size; the non-zero assembly lead time. Extensive numerical experiments are also carried out to understand the model behaviour with respect to parameter values, and some prominent observations are presented. In Part II, we consider a multiple-supplier, single-item inventory system where the item acquisition lead times of suppliers and demand arrival are random. The acquisition takes place when the inventory level depletes to a reorder point, and the order is splitted among suppliers. The acquisition lead times may have different distribution, the unit purchasing prices from suppliers may be different, and thus the order quantities for different suppliers may be different. The problem is to determine the reorder level and the order quantity for each supplier so that the expected total cost per unit time, consisting of the ordering cost, procurement cost, inventory holding cost and shortage cost is minimized. The shortage cost is charged per unit per unit time. Thus the inventory system presented in this study has the most general settings in the literature. A mathematical model is developed, describing the system in detail, and extensive numerical experiment is conducted to analyze the advantage and distinct characteristics of multiple-supplier systems against a single supplier system.
Year1996
Corresponding Series Added EntryAsian Institute of Technology. Dissertation ; no. ISE-96-01
TypeDissertation
SchoolSchool of Advanced Technologies (SAT)
DepartmentDepartment of Industrial Systems Engineering (DISE)
Academic Program/FoSIndustrial Systems Engineering (ISE)
Chairperson(s)Fujiwara, Okitsugu;
Examination Committee(s)Nagarur, Nagendra N.;Vilas Wuwongse;Gelders, Ludo F.;
Scholarship Donor(s)The Government of Japan ;
DegreeThesis (Ph.D.) - Asian Institute of Technology, 1996


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