Lead-Time Reduction In A Stochastic Inventory System With Learning Consideration
We develop a continuous review inventory model where lead-time is considered as a controllable variable. Lead-time is decomposed into all its components: set-up time, processing time and non-productive time. These components reflect the setup cost reduction, lot size lead-time interaction and lead-t...
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| Format: | article |
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2020
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| Online Access: | https://eprints.kfupm.edu.sa/id/eprint/2491/1/lead_time_reduction_in_a_stochastic_inve_ben_daya_isi_000180296500009.pdf |
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| Summary: | We develop a continuous review inventory model where lead-time is considered as a controllable variable. Lead-time is decomposed into all its components: set-up time, processing time and non-productive time. These components reflect the setup cost reduction, lot size lead-time interaction and lead-time crashing, respectively. The learning effect in the production process is also included in the processing time component of the lead-time. The finite investment approach for lead-time and set-up cost reduction and their joint optimization, in addition to the lot size lead-time interaction, introduce a realistic direction in lead-time management and control. A numerical example and a sensitivity analysis are presented using the design of experiments to investigate the effect of the model parameters and, in particular, those related to the different lead-time components on the the expected total cost. |
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