Abstract
A Common Order Cycle (COC) system is a multi-item inventory system where the items in stock are classified into several subgroups and all items in a particular group are replenished jointly by a common order cycle per group. The problem is to group N inventory items into r subgroups so as to minimize the inventory related cost. In this research, a stochastic demand model of the COC system was developed and dynamic programs were prepared for both optimal and approximate groupings. The proposed approximate algorithm gives, in effect, the optimal grouping for N and r given. It is also shown that the Relative Excess Cost (REC) for the COC system, compared to the cost of the non-grouping system, becomes very small for schemes involving more than three subgroups.
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References
Chakravarty, A.K., Multi-Item Inventory Aggregation into Groups, J. Opl Res. Soc., 32, 1 (1981) 19–26.
Chakravarty, A.K., Orlin, J.B., and Rothblum, U.G., A Partitioning Problem with Additive Objective with an Application to Optimal Inventory Groupings for Joint Replenishment, Oper. Res., 30, 5 (1982) 1018–1022.
Chakravarty, A.K., Joint Inventory Replenishments with Group Discounts Based on Invoice Value, Mgmt. Sci., 30, 9 (1984) 1105–1112.
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© 1985 Springer-Verlag Berlin Heidelberg
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Tanaka, T., Sawada, Y. (1985). Optimal Groupings of Inventory Items for a Common Order Cycle System. In: Bullinger, HJ., Warnecke, H.J. (eds) Toward the Factory of the Future. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-82580-4_43
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DOI: https://doi.org/10.1007/978-3-642-82580-4_43
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-82582-8
Online ISBN: 978-3-642-82580-4
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