MAGAZINE №4(87) August 2018


CATEGORY Inventory management Optimization and mathematical modelling


Optimization procedures of modern supply chains often require the consideration of a number of special factors that must reflect simulated cash flows so that the solutions found meet academic requirements in inventory management. The article evaluates the profitability of deliveries for the modified EOQ-model, in the format of which it will be possible to envisage the impact of the following factors. 1) The previously agreed possibility of deferring payment for an order. 2) The concept of the time value of money in the analysis of the cash flows of the simulated supply chain. 3) For incoming payments it is necessary to take into account that the proceeds from the sold goods will arrive with a predetermined delay (from the moment of its realization time). 4) The payment of storage costs is realized in the form of leasing the corresponding places in the warehouse, and with a delay for a specified time in relation to the middle of the reordering interval (in contrast to the traditional theory positions in the format of classical EOQ-models of inventory management).

In the case of such models, the existence of an estimate for the cost-effectiveness of the cash flows of the simulated supply chain will make it possible to use the new modified EOQ formulas taking into account the abovementioned factors. This will allow to optimize the reserves taking into account the time value of money in accordance with the requirements of financial analysis and financial mathematics. The research was carried out in relation to important for business situations of efficient supply, when the specified deferrals for payment of an order allow you to pay it out of the proceeds at the re-order intervals. Therefore, in order to simulate such processes, a necessary and sufficient condition has also been established in the paper, that must be imposed on the duration of such a delay in order to ensure the possibility of the specified payment of the order from the proceeds. The modification of such conditions is presented if, during optimization, it is necessary to take into account the need for payments from the revenue for payment of storage costs, as well as the required additional deductions related to maintaining the business processes. The features of supply optimization procedures are illustrated on the basis of numerical simulation results.

 Electronic version


MAGAZINE №2(85) April 2018


Brodetskiy G.L.

Gerami V.D.

Shidlovskiy I.G.

CATEGORY  Optimization and mathematical modelling Inventory management


 The article presents a special modification of the EOQ-formula for a diversified EOQ-model of inventory management with account to specifics of lot deliveries. It will allow  managers to determine the optimal parameters of the inventory management strategy if it is required to take into account the following features: 1) the possibility of order payment deferral; 2) time value of money at cashflow modelling 3) incomes specifics, when the proceeds come with a delay 4) specificity of storage costs payment (in form of rent or by the occupied storage space). In addition, the article specifies some options related to the possibility of using such a formula if it is necessary to additionally take into account: a) the restriction on the allowable length of the delay in payment of goods, so that the point of receipt of the proceeds did not exceed the corresponding reorder interval duration (on average); b) the vehicle capacity. The presented research materials on optimization of supplies will allow managers to estimate the effect of permissible delays in order payments, delays in receipt of proceeds, and the factor of vehicle capacity on the parameters of the optimal strategy of inventory management. The procedures of EOQ formula modification for inventory management systems are performed in relation to interesting and business-relevant models of this type that correspond to efficient deliveries, where these delays allow to make order payments from revenue at reordering intervals. 

 Electronic version



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