The performance of two popular service measures on management effectiveness in inventory control
Article Abstract:
A comparative study of two popular service measures on management effectiveness in inventory control was conducted. The objective was to examine the interrelationships between service, cost and inventory turns. Two sets of optimization models were utilized. One model considered the maximization of the service level as an objective subject to an available budget while the other involved the minimization of total variable costs as an objective function. Results provide important guidelines for inventory managers to make sound decisions.
Publication Name: International Journal of Production Economics
Subject: Engineering and manufacturing industries
ISSN: 0925-5273
Year: 1999
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Consolidating distribution centers can reduce lost sales
Article Abstract:
A generalized safety stock model is used to illustrate the benefits of consolidating distribution centers. It is shown that lost sales are proportional to the standard deviation of demand uncertainty while high fixed costs increase the probability of stockouts. Thus, consolidating distribution centers reduce the standard deviation for aggregate demand which, in turn, reduces lost sales.
Publication Name: International Journal of Production Economics
Subject: Engineering and manufacturing industries
ISSN: 0925-5273
Year: 1999
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