Analysis of a two-echelon multi-item inventory system with postponement

Eryılmaz, Hande
Increased product proliferation and global competition are forcing companies within the supply chain to adopt new strategies. Postponement is an effective strategy that allows companies to be agile and cost effective in dealing with the dynamics of global supply chains. Postponement centres around delaying activities in the supply chain until real information about the market is available, which reduces the complexity and uncertainty of dealing with a proliferation of products. A two-echelon divergent supply chain entailing a central production facility and N retailers facing stochastic demand is studied within the inventory-distribution system. A periodic review order-up-to strategy is incorporated at all echelons. Unique to the study, five different systems are created and the effectiveness of several postponement strategies (form and transshipment) under various operational settings are compared. The importance of postponement under an integrated supply chain context and its contribution to various sector implementations are also discussed. Simulation is used to analyze the performance of the systems especially with respect to cost, order lead time and the effectiveness of transshipment policies. The study is unique in determining factors that favour one system implementation over another and distinguishing sector requirements that support postponement. In the study, postponement is found to be an effective strategy in dealing with managing item variety, demand uncertainty and differences in review periods in the two echelon supply chain for different experimental settings.


An integrated inventory control and vehicle routing problem
Solyalı, Oğuz; Süral, Haldun; Department of Industrial Engineering (2005)
In this study, we consider a logistics system, in which a single supplier delivers a product to multiple retailers over a finite time horizon. Supplier decides on the amount to order in each period and services retailers facing deterministic dynamic demand via a fleet of vehicles having limited capacity. Each retailer has specific minimum and maximum levels of inventory in an order-up-to level inventory policy setting. The problem is to simultaneously determine the quantity of product to order to the suppli...
Limited quantity flexibility in a decentralized supply chain
Karakaya, Selçuk; Bakal, İsmail Serdar; Department of Industrial Engineering (2010)
In this study, we analyze a decentralized supply chain with a single retailer and a single manufacturer where the retailer sells two products in a single period. The products offered by the retailer consist of families of closely related products, which differ from each other in terms of a limited number of features only. The retailer places initial orders based on preliminary demand forecasts at the beginning of the period and has an opportunity to modify his initial order after receiving perfect demand in...
Optimal pricing and production decisions in reusable container systems
Atamer, Büşra; Bakal, İsmail Serdar; Department of Industrial Engineering (2010)
In this study, we focus on pricing and production decisions in reusable container systems with stochastic demand. We consider a producer that sells a single product to the customers in reusable containers with two supply options: (i) brand-new containers, (ii) returned containers from customers. Customers purchasing the products may return the containers to the producer to receive a deposit price. The return quantity depends on both customer demand and the deposit price determined by the producer. Hence, th...
Multi-item inventory-routing problem for an FMCG company
Zerman, Erel; Kırca, Ömer; Department of Industrial Engineering (2007)
In this study, inventoryrouting system of a company operating in Fast Moving Consumer Goods (FMCG) industry is analyzed. The company has decided to redesign distribution system by locating regional warehouses between production plants and customers. The warehouses in the system are all allowed to hold stock without any capacity restriction. The customers are replenished by the warehouse to which they have been assigned. Customer stocks are continuously monitored by the warehouse and deliveries are to be sch...
Mining association rules for quality related data in an electronics company
Kılınç, Yasemin; Özdemirel, Yasemin; Department of Industrial Engineering (2009)
Quality has become a central concern as it has been observed that reducing defects will lower the cost of production. Hence, companies generate and store vast amounts of quality related data. Analysis of this data is critical in order to understand the quality problems and their causes, and to take preventive actions. In this thesis, we propose a methodology for this analysis based on one of the data mining techniques, association rules. The methodology is applied for quality related data of an electronics ...
Citation Formats
H. Eryılmaz, “Analysis of a two-echelon multi-item inventory system with postponement,” M.S. - Master of Science, Middle East Technical University, 2010.