Analysis of safety stock for production- inventory problem of a company under multiplicative form of forecast evolution

Kayhan, Mehmet
In this thesis, we focus on integration issue of manufacturing and sales functions from the perspective of aggregate production planning. The manufacturing function and sales function are performed by separate affiliated companies of the same business group, which operate as an integrated supplier-buyer system. In particular, this study provides theoretical and practical insight into the use of forecast volatility measure to better match supply with demand so as to reduce the costs of inventory and stock-outs in the manufacturer-buyer relationship under described master production-scheduling environment. Nature of forecast modifications provided by the buyer lays the foundation for the study. We modify the existing aggregate production planning model to accommodate a measure of historical forecast evolution. The overall objective of the thesis is to provide management with aforecast evolution-modeling framework to examine performance characteristics of the manufacturer-buyer interaction.


Analysis of an inventory system under supply uncertainty
Gullu, R; Onol, E; Erkip, N (Elsevier BV, 1999-03-20)
In this paper, we analyze a periodic review, single-item inventory model under supply uncertainty. The objective is to minimize expected holding and backorder costs over a finite planning horizon under the supply constraints. The uncertainty in supply is modeled using a three-point probability mass function. The supply is either completely available, partially available, or the supply is unavailable. Machine breakdowns, shortages in the capacity of the supplier, strikes, etc., are possible causes of uncerta...
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Integrating multi-period quantity flexibility contracts with a capacitated production and inventory planning
Kayhan, Mehmet; Kayalıgil, Sinan; Department of Industrial Engineering (2008)
This research introduces a general approach for integrating a probabilistic model of the changes in the committed orders with an analytical model of production and inventory planning under multi-period Quantity Flexibility contracts. We study a decentralized structure where a capacitated manufacturer, capable of subcontracting, serves multiple contract buyers who actually perform forecasts on a rolling horizon basis. We model the evolution of buyers' commitments as a multiplicative forecast evolution proces...
Analysis of a deterministic demand production/inventory system under nonstationary supply uncertainty
Gullu, R; Onol, E; Erkip, N (Informa UK Limited, 1997-08-01)
In this article we investigate a periodic review inventory model under deterministic dynamic demand and supply unavailability. In a given period, supply is either available or completely unavailable with given probabilities. Supply unavailability probabilities are nonstationary over time. We show the optimality of an order-up-to level policy, and obtain a newsboy-like formula that determines the optimal order-up-to levels. Our formula would provide guidence as to the appropriate amount of inventory to stock...
Citation Formats
M. Kayhan, “Analysis of safety stock for production- inventory problem of a company under multiplicative form of forecast evolution,” M.S. - Master of Science, Middle East Technical University, 2003.