Inventory replenishment rules have been recognized as a major cause of the bullwhip effect and inventory instability in multi-echelon supply chains. There is a trade-off between bullwhip effect and inventory stability where mitigating the bullwhip effect through order smoothing might increase inventory instability. Therefore, there is a substantial need for inventory control policies that can cope with supply chains dynamics. This paper attempts to formulate an inventory control system based on a statistical control chart approach to handle the trade-off between order variability amplification and inventory stability. The proposed replenishment system, namely IR-SPC, incorporates individual control charts to control both the inventory position and the placed orders. A simulation study has been conducted to evaluate and compare the IR-SPC with a generalized order-up-to that has order smoothing mechanism. The comparisons showed that the IR-SPC outperforms both the smoothing order-up-to policy and the Min-Max inventory policy in terms of bullwhip effect and inventory performances.

Inventory control system based on control charts to improve supply chain performances / Costantino, Francesco; DI GRAVIO, Giulio; A., Shaban; Tronci, Massimo. - In: INTERNATIONAL JOURNAL OF SIMULATION MODELLING. - ISSN 1726-4529. - 13:3(2014), pp. 263-275. [10.2507/IJSIMM13(3)1.263]

Inventory control system based on control charts to improve supply chain performances

COSTANTINO, francesco;DI GRAVIO, GIULIO;TRONCI, Massimo
2014

Abstract

Inventory replenishment rules have been recognized as a major cause of the bullwhip effect and inventory instability in multi-echelon supply chains. There is a trade-off between bullwhip effect and inventory stability where mitigating the bullwhip effect through order smoothing might increase inventory instability. Therefore, there is a substantial need for inventory control policies that can cope with supply chains dynamics. This paper attempts to formulate an inventory control system based on a statistical control chart approach to handle the trade-off between order variability amplification and inventory stability. The proposed replenishment system, namely IR-SPC, incorporates individual control charts to control both the inventory position and the placed orders. A simulation study has been conducted to evaluate and compare the IR-SPC with a generalized order-up-to that has order smoothing mechanism. The comparisons showed that the IR-SPC outperforms both the smoothing order-up-to policy and the Min-Max inventory policy in terms of bullwhip effect and inventory performances.
2014
inventory control system; control chart; inventory variance; multi-echelon supply chain; bullwhip effect; simulation
01 Pubblicazione su rivista::01a Articolo in rivista
Inventory control system based on control charts to improve supply chain performances / Costantino, Francesco; DI GRAVIO, Giulio; A., Shaban; Tronci, Massimo. - In: INTERNATIONAL JOURNAL OF SIMULATION MODELLING. - ISSN 1726-4529. - 13:3(2014), pp. 263-275. [10.2507/IJSIMM13(3)1.263]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/597786
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