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Finished goods management for JIT production: new models for analysis

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Richard A. Ehrhardt, Professor (Creator)
Institution
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: A firm is considered that manages its internal manufacturing operations according to a just-in-time system, but maintains an inventory of finished goods as a buffer against random demands from external customers. The finished goods inventory may be analysed by the methods of classical inventory theory in order to characterize the trade-off between inventory costs and schedule stability. A model is formulated in which the supply of finished goods is replenished by a small fixed quantity each time period. The size of the replenishment quantity may be revised only at pre-specified intervals. The single-interval problem is analysed, the cost-minimizing value of the replenishment quantity for a given revision interval length is computed, and the optimal cost is characterized as a function of the revision interval length. The dynamic problem is shown to be convex, with relatively easily computed optima. Finally, alternative formulations of the problem are described and suggestions made for further research.

Additional Information

Publication
International Journal of Computer Integrated Manufacturing Vol 11, No.3. pp. 217-225.
Language: English
Date: 1998
Keywords
Just-in-time production, Finished goods, Demand, Management