STRATEGIC INVENTORY OPTIMIZATION

A company's inventory metrics are often viewed as critical indicators of its supply chain performance although inventory costs are only a fraction of total supply chain costs comprised of supplier, manufacturing, transportation, and warehousing costs, as well as inventory costs. Moreover, inven...

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Bibliographic Details
Published in:Journal of business logistics 2009-09, Vol.30 (2), p.161-173
Main Authors: Shapiro, Jeremy F., Wagner, Stephen N.
Format: Article
Language:English
Subjects:
Cost control
Customer services
Decision making
Decision making models
Design
Integer programming
Inventory control
Inventory management
Inventory simulation
Manufacturing
Mathematical programming
Network management systems
Optimization
Optimization techniques
Planning
Recipes
Regression analysis
Retail products distribution
Retailing industry
Strategic inventory deployment
Studies
Suppliers
Supply chain management
Supply chain network optimization
Supply chains
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Description
Summary:A company's inventory metrics are often viewed as critical indicators of its supply chain performance although inventory costs are only a fraction of total supply chain costs comprised of supplier, manufacturing, transportation, and warehousing costs, as well as inventory costs. Moreover, inventories across the supply chain are dependent on acquisition and distribution decisions. We discuss how simulation and optimization models can be combined to integrate analysis of inventory and supply chain network design decisions in performing a total cost analysis. An application of the models to plans for distributing retail products to an expanding network of stores is reviewed.
ISSN:0735-3766
2158-1592
DOI:10.1002/j.2158-1592.2009.tb00117.x