ILS 2012

Québec, Canada, 26 — 29 August 2012

ILS 2012

Québec, Canada, 26 — 29 August 2012

Schedule Authors My Schedule

REGULAR SESSION: Inventory Theory and Management

Aug 28, 2012 02:30 PM – 04:00 PM

Location: VCH-2880

Chaired by Valérie Botta-Genoulaz

4 Presentations

  • 02:30 PM - 02:52 PM

    Inventory Management of Spare Parts in an Energy Company

    • Mario Guajardo, presenter, NHH Norwegian School of Economics and Business Administration
    • Mikael Rönnqvist, Norwegian School of Economics and Business Administration

    We address a problem of inventory management of spare parts in the context of a large energy company, producer of oil and gas. Spare parts are critical for assuring operational conditions in offshore platforms. About 200,000 different items are held in several inventory plants. The inventory system implemented at the company corresponds to a min-max system. The control parameters are decided based mainly on the expert judgment of the planners. Also, though the inventory plants can in practice be supplied from each other, the inventory planning is performed separately by the plant planners. This is because of different ownership structures where the studied company has the operative responsibility. The company is pursuing a system in which all planners conform to the same inventory management approach and evaluation, as well as being more cost efficient. Our work focuses on supporting this goal. We apply methods to decide the inventory control parameters for this system under a service level constraint. The methodology we use distinguishes unit-size and lot-size demand cases. We perform computational experiments to find control parameters for a sample of items. After the control parameters are found, we use them to explore the impact of risk pooling among the plants and inaccuracy arising from duplicate item codes.

  • 02:52 PM - 03:14 PM

    Impact of Fuel Price on Economic Order Quantity (EOQ)

    • Amulya Gurtu, presenter, Ryerson University (Department of Mechanical and Industrial Engineering)
    • Mohamad Y. Jaber, Ryerson University
    • Cory Searcy, Ryerson University

    This paper provides an overview of the impact of oil price on Economic Order Quantity (EOQ) in supply chains. It presents trends in the global energy mix, and discusses alternate sources of energy, fuel options in meeting future energy demands, a brief discussion on the limitations of some of the alternate energy sources and dependence on fossil fuels in cargo transportation. It talks about the trend of oil prices based on data since 1990, oil production/consumption and estimated oil prices in the future. It further examines the impact of changes in oil prices on EOQ and develops a model for calculating EOQ that includes these changes. The model is used to present three cases that show the impact of increases in oil price on EOQ and concludes with a discussion of its effect on organizations in managing the global supply chains in the future.

  • 03:14 PM - 03:36 PM

    Approximation Algorithms for Deterministic Continuous-review Inventory Lot-sizing Problems with Time-varying Parameters

    • Guillaume Massonnet, presenter, Laboratoire G-SCOP
    • Jean-Philippe Gayon, Laboratoire G-SCOP
    • Christophe Rapine, Université de Metz

    This work deals with the continuous-review lot-sizing inventory problem with time-varying parameters. We adapt a cost balancing technique developed for the periodic-review version of our problem to the continuous-review framework. We prove that the solution obtained costs at most twice the cost of an optimal solution. Then we study the numerical complexity of the algorithm and generalize the policy to several important extensions while preserving its performance guarantee of two. Finally, we propose a modified version of our algorithm for the basic model with slightly restricted settings that improves the worst-case bound.

  • 03:36 PM - 03:58 PM

    Inventory Inaccuracies in the Internet Retailing: A Comparison Study between the Additive and the Multiplicative Error Settings

    • Selma Afakh Khader, presenter, INSA-Lyon
    • Yacine Rekik, EMLYON Business School
    • Jean-Pierre Campagne, INSA-Lyon
    • Valerie Botta-Genoulaz, INSA-LYON

    The standard literature on inventory modeling is rarely differentiating between the inventory records and the physical inventory. In the recent years, some empirical studies – mainly developed around the deployment of a new identification technology such as RFID - highlighted that errors and inventory perturbations may occur in the inventory system. Such errors result in a gap between what the information system shows and what is actually available for sales and used to satisfy the demand. The impact of such errors is particularly important in a wholesaling / e-retailing context where customer’ demands are remotely satisfied based on the inventory record shown in the information system. These errors could be presented by an additive or multiplicative structure. In this paper we provide an analytical study about the multiplicative error setting in the internet retailing and we compare its performance with the additive error setting.