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In-Process Inventories

Author

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  • Kenneth F. Simpson

    (Arthur D. Little, Inc., Cambridge, Massachusetts)

Abstract

Many manufacturing operations can be looked upon as chains of operations separated by inventories. In any real case, there is a question about how inventory investment should be balanced between these various in-process inventories. Investigation of this situation for a very general control system---the base-stock system---leads to some general results which enable one to answer this question by examining a (generally small) finite number of possibilities. The conclusion may be stated “The service time for any inventory should be zero”. An important corollary of the method is that it answers the question of what points in the manufacturing operation should be inventory points and what points should not.

Suggested Citation

  • Kenneth F. Simpson, 1958. "In-Process Inventories," Operations Research, INFORMS, vol. 6(6), pages 863-873, December.
    • Handle: RePEc:inm:oropre:v:6:y:1958:i:6:p:863-873
    DOI: 10.1287/opre.6.6.863
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    Cited by:

    1. Steffen T. Klosterhalfen & Stefan Minner & Sean P. Willems, 2014. "Strategic Safety Stock Placement in Supply Networks with Static Dual Supply," Manufacturing & Service Operations Management, INFORMS, vol. 16(2), pages 204-219, May.
    2. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    3. Tan Wang & L. Jeff Hong, 2023. "Large-Scale Inventory Optimization: A Recurrent Neural Networks–Inspired Simulation Approach," INFORMS Journal on Computing, INFORMS, vol. 35(1), pages 196-215, January.
    4. Aouam, Tarik & Kumar, Kunal, 2019. "On the effect of overtime and subcontracting on supply chain safety stocks," Omega, Elsevier, vol. 89(C), pages 1-20.
    5. Kumar, Kunal & Aouam, Tarik, 2019. "Extending the strategic safety stock placement model to consider tactical production smoothing," European Journal of Operational Research, Elsevier, vol. 279(2), pages 429-448.
    6. Klosterhalfen, Steffen T. & Willems, Sean P. & Dittmar, Daniel, 2023. "Safety stock placement in supply chains with expediting," European Journal of Operational Research, Elsevier, vol. 307(2), pages 745-757.
    7. Barros, Júlio & Cortez, Paulo & Carvalho, M. Sameiro, 2021. "A systematic literature review about dimensioning safety stock under uncertainties and risks in the procurement process," Operations Research Perspectives, Elsevier, vol. 8(C).
    8. Schuster Puga, Matías & Minner, Stefan & Tancrez, Jean-Sébastien, 2019. "Two-stage supply chain design with safety stock placement decisions," International Journal of Production Economics, Elsevier, vol. 209(C), pages 183-193.
    9. Salal Humair & John D. Ruark & Brian Tomlin & Sean P. Willems, 2013. "Incorporating Stochastic Lead Times Into the Guaranteed Service Model of Safety Stock Optimization," Interfaces, INFORMS, vol. 43(5), pages 421-434, October.
    10. Stephen C. Graves & Tor Schoenmeyr, 2016. "Strategic Safety-Stock Placement in Supply Chains with Capacity Constraints," Manufacturing & Service Operations Management, INFORMS, vol. 18(3), pages 445-460, July.
    11. Ding, Yi & Gao, Xing & Huang, Chao & Shu, Jia & Yang, Donghui, 2018. "Service competition in an online duopoly market," Omega, Elsevier, vol. 77(C), pages 58-72.
    12. Achkar, Victoria G. & Brunaud, Braulio B. & Pérez, Héctor D. & Musa, Rami & Méndez, Carlos A. & Grossmann, Ignacio E., 2024. "Extensions to the guaranteed service model for industrial applications of multi-echelon inventory optimization," European Journal of Operational Research, Elsevier, vol. 313(1), pages 192-206.
    13. Salal Humair & Sean P. Willems, 2006. "Optimizing Strategic Safety Stock Placement in Supply Chains with Clusters of Commonality," Operations Research, INFORMS, vol. 54(4), pages 725-742, August.
    14. Yazdani, Majid & Aouam, Tarik, 2023. "Shipment planning and safety stock placement in maritime supply chains with stochastic demand and transportation times," International Journal of Production Economics, Elsevier, vol. 263(C).
    15. Gihan S. Edirisinghe & Thamer Almutairi, 2023. "Multi-Echelon Inventory Optimization for Practitioners: a Predictive Global Sensitivity Analysis Approach," SN Operations Research Forum, Springer, vol. 4(2), pages 1-20, June.
    16. Ghadimi, Foad & Aouam, Tarik, 2021. "Planning capacity and safety stocks in a serial production–distribution system with multiple products," European Journal of Operational Research, Elsevier, vol. 289(2), pages 533-552.
    17. Darmawan, Agus & Wong, Hartanto & Thorstenson, Anders, 2021. "Supply chain network design with coordinated inventory control," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    18. Bertazzi, Luca & Bosco, Adamo & Laganà, Demetrio, 2016. "Min–Max exact and heuristic policies for a two-echelon supply chain with inventory and transportation procurement decisions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 57-70.
    19. John M. Bossert & Sean P. Willems, 2007. "A Periodic-Review Modeling Approach for Guaranteed Service Supply Chains," Interfaces, INFORMS, vol. 37(5), pages 420-436, October.
    20. Fichtinger, Johannes & Chan, Claire (Wan-Chuan) & Yates, Nicola, 2019. "A joint network design and multi-echelon inventory optimisation approach for supply chain segmentation," International Journal of Production Economics, Elsevier, vol. 209(C), pages 103-111.
    21. B Desmet & E-H Aghezzaf & H Vanmaele, 2010. "A normal approximation model for safety stock optimization in a two-echelon distribution system," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(1), pages 156-163, January.

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