MAGAZINE  №6 (95) December 2019

AUTHORS BRODETSKIY G.L., SHIDLOVSKIY I.G. 

CATEGORY  Inventory management Optimization and mathematical modelling

 

ABSTRACT

 The article presents a special modification of the EOQ-formula for the task of minimizing inventory management costs, for the model with rental storage, taking into account the specifics of the supply process. Modifications of special EOQ formulas for systems of the specified type were made directly for models important in the format of the corresponding business. These are systems for which a special concept of effective deliveries is introduced, when the specified delays for outgoing cash flows make it possible to pay for the order and the corresponding costs of the supply chain from the proceeds at the re-order interval. It will give managers the opportunity to find the optimal inventory management strategy if it is necessary to take into account the combined impact of a number of factors affecting decision-making procedures. We are talking about the need to consider the following factors: 1) the time value of money when cash flows of the analyzed supply chain are modeled; 2) the time delay granted to pay for the value of the delivered order; 3) pre-negotiated allowable for the duration of possible delays in the receipt of revenue from goods sold. The purpose of the article is to draw the attention of managers to existing (and still not used) opportunities to improve the efficiency of inventory management systems by taking into account these factors for a simulated supply chain and provide the appropriate tool as part of the task. The developed approach to inventory optimization while minimizing the costs of the supply chain, significantly will modify the EOQ – formula format to determine the size of the order. The optimal supply volumes taking into account the indicated modification, will become significantly smaller (in comparison with the traditional recommendations of the theory), which will favorably affect the value of working capital, the amount of capital frozen in stocks of goods, and the profitability of the supply chain itself. Formed restrictions on the allowable delay in revenue will determine the fulfillment of the conditions for the effectiveness of supply established in this article. In addition, the application of the developed model is presented on the example of a practical situation.

 Electronic version

 Keywords: inventory management time value of money deferred order payments revenue delay vehicle capacity vehicle cargo capacity

 

MAGAZINE №2(85) April 2018

AUTHORS 

Brodetskiy G.L.

Gerami V.D.

Shidlovskiy I.G.

CATEGORY  Optimization and mathematical modelling Inventory management

ABSTRACT

 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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MAGAZINE №5 (82) October 2017

AUTHORS  GERAMI V.D.KOLIK A.V., SHIDLOVSKIY I.G.

CATEGORY  Optimization and mathematical modelling Inventory management

ABSTRACT

A new improved algorithm to optimize the parameters of a diversified supply strategy considering the transportation features for the EOQ-models is proposed. When optimizing decisions it will allow for the first time to take into account the following attributes of the simulated supply chain: 1) cargo capacity of the vehicles used; 2) a possibility of selecting their types when delivering goods; 3) the format of paying storage costs (rent or paying only for occupied places at the warehouse); 4) expediency of deliveries using several vehicles if there are discounts on the cost of such deliveries; 5) factor of time value of money taking into account the efficiency of cash flows of the supply chain itself; 6) assessment of the expected return on the working capital of the simulated supply chain; 7) specificity of such a profitability indicator taking into account the utilization of the cargo capacity of the vehicles used at the deliveries. This algorithm was developed with reference to special EOQ-models. Namely, it relates to a class of models interesting and important for business when profit can be made at each reorder interval. The models in question are those where profit during the reordering interval can be used both to cover part of the costs at that interval and to make payment of the next delivery. Therefore, the format of the algorithm will consider necessary and sufficient conditions fulfillment of which allows to ensure the possibility of these payments from the profit during the supply chain operation. 

 Electronic version

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MAGAZINE №5 (76) October 2016

AUTHORS

GERAMI V.D.

SHIDLOVSKIY I.G. - Assistant, Department of Logistic Infrastructure Management, National Research University Higher School of Economics (Moscow, Russia)

CATEGORY  Inventory management Optimization and mathematical modelling Transportation in logistics

ABSTRACT

Transport maintenance of multiproduct inventory management deliveries problems are especially relevant nowadays if for their solving the vehicle cargo load / capacity is taken into account. Such decisions are required for situations, when it is not possible to place defined by traditional formulas optimal order quantity in vehicle due to existing restrictions on overall dimen sions or weight. The purpose of the article is to help managers working in this area, in harnessing new approaches and methods for making optimal / best decisions on the transport provision of supplies with regard to such situations. We are talking about the possibility of using available hidden reserves for increasing the efficiency of the specified type supply chain operation. Such possibilities can be provided by taking into account several important factors in optimization, such as: 1) time value of money; 2) the specifics of supply chain cash flows which determined by the format of storage costs calculation (rent, or paying only for the occupied places in a warehouse); 3) vehicle cargo load / capacity; 4) and also the possibility of an effective supply maintenance using multiple vehicles per each delivery. The criterion for decisions optimization is the traditional for such type of models minimization of supply chain operation costs in a format of corresponding inventory management EOQ-model modification that allows to take mentioned above factors into account. For the model modification implementation it was required to develop the new universal formal of both the model and corresponding EOQ-formula what is firstly realized in this article for the multinomenclature supplies. Such a new model representation format allowed in a uniform way, i.e. at once for all of model modifications, to carry out the analysis of joint deliveries by several vehicles feasibility at discounts on the costs of such deliveries. It is proved the necessary and sufficient condition that establish the acceptable / threshold level of prices at which the joint deliveries in format of such multinomenclature models can be effective, in order to compete with traditional solutions. Numerical example illustrates the effectiveness of the proposed approach to the optimization of transport maintenance of deliveries at inventory management multinomenclature models.

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