Abstract
Inventory planning and control is one of the logical decisions that follows vendor selection. Once vendors and the total amount of order are determined the next step is to determine the economical order quantity and the ordering frequency. The economic order quantity (EOQ) should be determined based on total costs and service levels. The objectives of minimizing total inventory costs and maximizing service levels are conflicting in nature. Maximization of service level relates to providing a variety of items and ensuring their availability at all times and at all places. This requires maintaining a large inventory of multiple items at several locations close to consumers. Hence, an economic tradeoff is needed between inventory costs and service levels.
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References
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Further Reading
Ansari, A. and Modarress, B. (1986) Just-in-time purchasing: problems and solutions. Journal of Purchasing and Materials Management, 11–15.
Buffa, F.P. and Munn, J.R. (1990) Multi-item grouping algorithm yielding near-optimal logistics cost. Decision Sciences, 14–34.
Council of Logistics Management (1994) Bibliography of Logistics Training Aids, 2803 Butterfield Road, Suite 38, Oak Brook, IL 60521.
Hong, J.-D. and Hayya, J.C. (1992) Just-in-time purchasing: single or multiple sourcing. International Journal of Production Economics, 175–181.
Kasilingam, R.G. (1997) An economic model for overbooking of inventory under uncertainty. Computers and Industrial Engineering: An International Journal, 221–226.
Kasilingam, R.G. and Tabucanon, M.T. (1987) Integrated production and sales planning in a paper mill using linear programming. Modern Production Management Systems, Elsevier, New York, pp. 257–264.
Langley, C.J. Jr (1981) The inclusion of transportation costs in inventory models. Journal of Business Logistics, 2, 106–125.
Pan, A.C. and Liao, C.-J. (1989) An inventory model under just-in-time purchasing agreements. Production and Inventory Management Journal, 49–52.
Ramasesh, R.V. (1990) Recasting the traditional inventory model to implement just-in-time purchasing. Production and Inventory Management Journal, 71–75.
Russell, R.M. and Krajewski, L.J. (1991) Optimal purchasing and transportation cost lot sizing for a single item. Decision Sciences, 940–952.
Russell, R.M. and Krajewski, L.J. (1992) Coordinated replenishments from a common supplier. Decision Sciences, 610–632.
Training Aids: Videotapes
Penn State Audio-Visual Services, tel. (800) 826-0312
Business Logistics Management Series: Inventory in the Logistics System Business Logistics Management Series: Adapting the Basic EOQ Model for Logistical Decisions
Business Logistics Management Series: Techniques of Inventory Management Business Logistics Management Series: The Basic EOQ Model
Tompkins Associates, tel. (919) 876-3667
Manufacturing: Making a Difference
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© 1998 Springer Science+Business Media Dordrecht
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Kasilingam, R.G. (1998). Inventory planning. In: Logistics and Transportation. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5277-2_5
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DOI: https://doi.org/10.1007/978-1-4615-5277-2_5
Publisher Name: Springer, Boston, MA
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