Dynamic lot sizing model for retailers with multi suppliers, quantity discounts, and capacity constraints that consider advance demand informations
Submitted: 2024-01-08
|Accepted: 2024-07-16
|Published: 2024-07-26
Copyright (c) 2024 Rendiyatna Ferdian, Abdul Hakim Halim
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Downloads
Keywords:
Dynamic lot sizing, advance demand information (ADI), multi suppliers, quantity discounts, capacity constraints
Supporting agencies:
Widyatama University
Abstract:
The Dynamic lot sizing (DLS) model is widely used in production planning, to minimize inventory levels, which basically will minimize production costs. The DLS model tries to eliminate the assumption of a fixed demand level throughout the period used in the Economic Order Quantity (EOQ) model. The characteristics of business processes in online retailers are the basis of this research to develop DLS models. This research develops a DLS model for retailers with multi-supplier cases, quantity discounts, and capacity constraints that consider Advanced Demand Information (ADI). Based on the numerical test results, it appears that ADI has an effect on reducing total production costs in the DLS model. The results of the numerical tests also showed that the model was able to solve the problems of the production planning process for SMEs and retailers who considered ADI.
References:
Bai, Q.-G., & Xu, J.-T. (2010). Optimal Solutions for the Economic Lot-sizing Problem wotj Multiple Suppliers and Cost Structures. Journal of Applied Mathematics and Computing, 331-345. https://doi.org/10.1007/s12190-010-0437-0
Boctor, F. (2022). Single-machine Capacitated Lot-sizing and Scheduling with Delivery Dates and Quantities. International Journal of Production Research, 7345-7359. https://doi.org/10.1080/00207543.2022.2036853
Bodt, M., Gelders, L. F., & Wassenhove, L. V. (1984). Lot Sizing under Dynamic Demand Conditions: A Review. Engineering Costs and Production Economics, 165-187. https://doi.org/10.1016/0167-188X(84)90035-1
Brahimi, N., Absi, N., Dauzère-Pérès, S., & Nordli, A. (2017). Single-item Dyanmic Lot-sizing Problems: An Update Survey. European Journal of Operational Research, 838-868. https://doi.org/10.1016/j.ejor.2017.05.008
Brahimi, N., Dauzere-Peres, S., Najid, N., & Nordli, A. (2006). Single Item Lot Sizing Problems. European Journal of Operational Research, 1-16. https://doi.org/10.1016/j.ejor.2004.01.054
Chung, C.-S., Chiang, D., & Lu, C.-Y. (1987). Al Optimal Algorithm for the Quantity Discount Problem. Journal of Operations Management, 165-177. https://doi.org/10.1016/0272-6963(87)90015-5
Dombrowski, U., Richter, T., & Krenkel, P. (2017). Interdependencies of Industrie 4.0 & Lean Production System - a use case analysis -. 27th International Conference on FLexible Automation and Intelligent Manufacturing, FAIM2017 (pp. 1061-1068). Modena: Procedia Manufacturing. https://doi.org/10.1016/j.promfg.2017.07.217
Federgruen, A., & Lee, C.-Y. (1990). The Dynamic Lot Size Model with Quantity Discount. Naval Research Logistics, 707-713. https://doi.org/10.1002/1520-6750(199010)37:5<707::AID-NAV3220370509>3.0.CO;2-5
Gati, K. V., & Banyai, T. (2023). Impact of Dyanmic Lot Sizing Techniques on Costs of Material Requirement Planning. Advanced Logistics Systems - Theory and Practice, 71-78. https://doi.org/10.32971/als.2023.009
Ghaniabadi, M., & Mazinani, A. (2017). Dyanamic Lot Sizing with Multiple Suppliers, Backlogging and Quantity Discounts. Computers & industrial Engineering, 67-74. https://doi.org/10.1016/j.cie.2017.05.031
Jaruphongsa, W., Çetinkaya, S., & Lee, C.-Y. (2005). A Dynamic Lot-sizing Model with Multi-mode Replenishments: Polynomial Algorithms for Special Cases with Dual and Multiple Modes. IEE Transaction, 453-467. https://doi.org/10.1080/07408170590918218
Lee, A., Kang, H.-Y., Lai, C.-M., & Hong, W.-Y. (2013). An Integrated Model for Lot Sizing with Supplier Selection and Quantity Discounts. Applied Mathematical Modelling, 4733-4746. https://doi.org/10.1016/j.apm.2012.09.056
Lotfi, V., & Yoon, Y.-S. (1994). An Algorithm for the Single-item Capacitated Lot-sizing Problem with Concave Production and Holding Costs. Journal of the Operational Research Society, 934-941. https://doi.org/10.1057/jors.1994.145
Mazdeh, M. M., Emadikhiav, M., & Parsa, I. (2015). A Heuristic to Solve the Dynamic Lot Sizing Problem with Supplier Selection and Quantity Discount. Computers & Industrial Engineering, 33-43. https://doi.org/10.1016/j.cie.2015.02.027
Nakade, K., & Seino, T. (2021). Effect of Informed Demand Lead Time Under Imperfect Advanced Demand Information. IFIP International Conference on Advances in Production Management Systems (APMS) (pp. 464-474). Nantes: Springer. https://doi.org/10.1007/978-3-030-85874-2_49
Randall, T., Netessine, S., & Rudi, N. (2006). An Empirical Examination of the Decision to Invest in Fulfillment Capabilities: A Study of Internet Retailers. Management Science, 567-580. https://doi.org/10.1287/mnsc.1050.0493
Rodriguez-Garcia, M., Bas, A. O., Prado-Prado, J. C., & Lyons, A. (2023). Fullfillment Cost in Online Grocery Retailing: Comparing Retail Store and Warehouse Strategies. International Journal of Production Management and Engineering, 127-145. https://doi.org/10.4995/ijpme.2023.18442
Tabar, B., & Sahin, E. (2015). The Impact of Advanced Demand Information on the Performance of Production/Inventory Systems. International Federation of Automatic Control (pp. 1744-1749). Elsevier. https://doi.org/10.1016/j.ifacol.2015.06.338
Wagner, H. M., & Whitin, T. M. (1958). Dynamic Version of the Economic Lot Size model. Management Science Vol. 5, No. 1, 89-96. https://doi.org/10.1287/mnsc.5.1.89
Xu, H., Gong, Y., Chu, C., & Zhang, J. (2017). Dynamic Lot-sizing Models for Retailers with Online Channels. International Journal Production Economics, 171-184. https://doi.org/10.1016/j.ijpe.2016.10.020
Zhao, Y., & Klabjan, D. (2012). A Polyhedral Study of Lot-sizing with Supplier Selection. Discrete Optimization, 65-76. https://doi.org/10.1016/j.disopt.2011.09.001
Zhou, Y.-W. (2007). A Comparison of Different Quantity Discount Pricing Policies in a Two-echelon Channel with Stochastic and Asymmetric Demand Information. European Journal of Operational Research, 686-703. https://doi.org/10.1016/j.ejor.2006.08.001
