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Efficient Supply Chain Inventory Management Policies for Integrated Stations

Understand the principles of demand-driven inventory and lead time management strategies in a supply chain setting. Learn about backlog base policy and optimal inventory positioning. Utilize nested stationarity and lot sizing techniques for effective inventory control.

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Efficient Supply Chain Inventory Management Policies for Integrated Stations

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  1. Policies for an Integrated SC

  2. A SC

  3. Principles • Inventory depends on demand during Lead Time • Lead Time = L + Backlog Previous Station • Or Max(L + backlog) over all previous stations

  4. L = Processing Time + Transportation + Lot Time +… (7/11) Demand over the delivery lag Backlog

  5. Base Policy: Keep Inv. Position = s DLag = D*(L+Tb)

  6. Summary

  7. In general

  8. Nested Stationary Power of 2

  9. Very Flat • Optimal power of 2 policy less than 16% worse than Optimal

  10. BOMT = (1,1,1,2,2,2,2,8,16,16,16,16) 1,2,3

  11. Upstream

  12. Upstream

  13. In general

  14. Lot sizes

  15. USE the SOLVER

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