Abstract
In Turkey, Pınar Et is one of the leading companies in meat sector since 1985. Within the scope of senior year project, this paper considers the optimization of lot sizes of auxiliary and packaging materials, purchased by the company. Aim of the study is the minimization of total inventory costs, which include unit purchasing, setup, and holding costs subject to a service level. For this purpose, multi-item dynamic lot sizing models are formulated with time-varying demand, deterministic lead time, with backorders allowed. The first model is formulated by considering Joint Replenishment of items supplied from the same suppliers. The second model is formulated to reflect Vendor-Based minimum lot sizes and rounding quantities to the replenishment quantity. Although these models produce an optimal solution in a reasonable time, a Wagner-Whitin based heuristic algorithm is developed as an additional solution to the company. All of the models run according to Rolling Horizon (RH) approach, which updates the existing plan at the beginning of each planning period in order to cope with changes in demand and other parameters. As a result of the study, potential savings in holding cost and reduction in planning duration are obtained and are reported.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Sven, A.: Inventory Control. Springer, New York (2006)
Wagner, H.M., Whitin, T.M.: Dynamic version of the economic lot size model. Manage. Sci. 5, 89–96 (1958)
Sahin, F., Narayanan, A., Robinson, P.: Rolling horizon planning in supply chains: review, implications and directions for future research. Int. J. Prod. Res. 51, 5413–5436 (2012)
Kabak, K.E., Ornek, A.M.: An improved metric for measuring multi-item multi-level schedule instability under rolling schedules. Comput. Ind. Eng. 56(2), 691–707 (2009)
Aksoy, Y., Selcuk Erenguc, S.: Multi-item inventory models with co-ordinated replenishments: a survey. Int. J. Oper. Prod. Manag. 8(1), 63–73 (2013)
Khouja, M., Goyal, S.: A review of the joint replenishment problem literature: 1989–2005. Eur. J. Oper. Res. 186(1), 1–16 (2008)
Salameh, M.K., Yassine, A.A., Maddah, B., Ghaddar, L.: Joint replenishment model with substitution. Appl. Math. Model. 38(14), 3662–3671 (2014)
Backorder Costs: Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail. https://investinganswers.com/financial-dictionary/businesses-corporations/backorder-costs-4856
Acknowledgment
This study is supported by The Scientific and Technological Research Council of Turkey (TUBITAK) in the program of “2209-B Undergraduate Research Projects for Industrial Applications Fellowship Program”. We would like to express our special appreciation and thanks to our advisors at Yaşar University; especially Dr. Onder Bulut for assisting this difficult study, with constructive comments that greatly improved the paper. Also we would like to acknowledge the studied company Pınar Et for their cooperation and providing necessary data during this educational process.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this paper
Cite this paper
Başay, M. et al. (2020). Lot Size Optimization of Purchased Products. In: Durakbasa, N., Gençyılmaz, M. (eds) Proceedings of the International Symposium for Production Research 2019. ISPR ISPR 2019 2019. Lecture Notes in Mechanical Engineering. Springer, Cham. https://doi.org/10.1007/978-3-030-31343-2_60
Download citation
DOI: https://doi.org/10.1007/978-3-030-31343-2_60
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-31342-5
Online ISBN: 978-3-030-31343-2
eBook Packages: EngineeringEngineering (R0)