An Integrated Location Inventory Model

An Integrated Location/Inventory Model

Traditional Models ,[object Object],[object Object],[object Object],[object Object],[object Object]

Outline ,[object Object],[object Object]

Problem ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Problem ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Costs and Inputs N(  i ,  i 2 ) Working Inventory Safety Stock Inventory Customer Set Customer served by another DC Transport Cost Fixed Volume dependent (constant + mileage related) Lead time Fixed Cost Transport Cost

Key Issues ,[object Object],[object Object],[object Object]

If we knew customer set … ,[object Object]

Inventory at DC Time Inventory Safety Stock Reorder Point Lead Time Lead Time Reorder Size Reorder Size Reorder Size

Inventory Costs ,[object Object],[object Object]

Order Frequency, n ,[object Object],[object Object]

With Linear Transport Costs… And…

Key Point ,[object Object],[object Object]

Model Form Fixed + local delivery + volume based ship to DC But only to open DCs Each demand assigned Working inventory, (transport to DC), Safety stock Integrality

An Integrated Location Inventory Model

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An Integrated Location Inventory Model