Optimizing Supply Chain Inventory Policies under Penalty Costs

• Main Authors: Yen Ming Tsan, 顏名璨
• Other Authors: 陳靜瑜助理教授
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/85217626314849164039

碩士 === 東海大學 === 國際貿易學系 === 98 === 　　In today’s business environment, enterprises are required to deliver promptly and to respond more quickly to the market than their competitors in order to gain competitive advantages. 　　 　　Therefore, a guaranteed delivery date to customers becomes the necessity of a company’s success. However, a guaranteed delivery is subject to lead-times which include procurement, production/process and transportation times. To guarantee delivery time, companies must keep adequate inventory to avoid waiting or delays. However, excess inventory causes overstocking of capital and decreased inventory turnover ratios; and thus, increases the operating costs. In contrast, if companies fail to deliver orders in the guaranteed time due to inadequate inventory, they encounter lost sales and penalty costs. Therefore, it is necessary for companies to make inventory decisions to minimize holding and penalty costs while maintaining a high level of customer satisfactions. . 　　The primary intent of this research is to develop an optimization inventory model for multi-stage supply chain networks. We assume each stage in the supply chain follows a continuous inventory review policy (S-1, S). It is assumed when the last stage, which faces the end customers, fails to deliver orders in the guaranteed delivery time, a linear penalty cost will be added to the total supply chain costs. In this research, mathematical models are formulated to minimize total supply chain costs and numerical studies are provided to test inventory decisions under different scenarios and to provide managerial insights.