Logistics-oriented inventory analysis

Logistics-oriented inventory analysis

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Article ID: iaor200454
Country: Netherlands
Volume: 85
Issue: 2
Start Page Number: 217
End Page Number: 231
Publication Date: Jan 2003
Journal: International Journal of Production Economics
Authors: , ,
Keywords: production
Abstract:

One way of reducing costs in manufacturing is to adjust and reduce stock levels whilst taking account of logistical requirements. A model has been developed for inventory management which allows target-oriented control of the related logistic process. This paper describes the employment of operating curves representing the relationship between mean inventory level on the one hand and mean delivery delay or service level on the other hand. The operating curves can be used for evaluating different fields of materials management. They can be employed to specify the limit values of the logistic objectives for single items. Suitable targets for service levels can be developed and the potential to reduce inventory while maintaining delivery performance can be identified. Furthermore, by modifying the parameters of the curves, the effects of improvements in particular areas such as delivery reliability on the supply side can be judged. Inventory operating curves display interdependencies between the logistical performance measures of the inventory process. This makes it possible not only to determine planning parameters and performance indicators for the materials management process but also to evaluate their interdependencies and effects on the logistic performance.

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