An Application of a Cost Minimization Model in Determining Safety Stock Level and Location.

1
Bahareh Amirjabbari
Bahareh Amirjabbari
2
Nadia Bhuiyan
Nadia Bhuiyan
1 Concordia University

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In recent decades, the lean methodology and the development of its principles and concepts have widely been applied in supply chain management. One of the most important strategies of being lean is having efficient inventory within the whole supply chain. Managing inventory efficiently requires appropriate management of safety stock in order to compensate the weakness of the supply chain for product availability.A nonlinear cost minimizationsafety stock model with the objective of minimizing the total logistics cost is developed in this paper. This modelis also applied to a real-world case company which is a manufacturer.The model results in optimum levels and locations of safety stock within the company’s supply chain in order to minimize total logistics costs.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

Bahareh Amirjabbari. 2015. \u201cAn Application of a Cost Minimization Model in Determining Safety Stock Level and Location.\u201d. Global Journal of Research in Engineering - G: Industrial Engineering GJRE-G Volume 15 (GJRE Volume 15 Issue G3): .

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Crossref Journal DOI 10.17406/gjre

Print ISSN 0975-5861

e-ISSN 2249-4596

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GJRE-G Classification: FOR Code: 290502
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November 4, 2015

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In recent decades, the lean methodology and the development of its principles and concepts have widely been applied in supply chain management. One of the most important strategies of being lean is having efficient inventory within the whole supply chain. Managing inventory efficiently requires appropriate management of safety stock in order to compensate the weakness of the supply chain for product availability.A nonlinear cost minimizationsafety stock model with the objective of minimizing the total logistics cost is developed in this paper. This modelis also applied to a real-world case company which is a manufacturer.The model results in optimum levels and locations of safety stock within the company’s supply chain in order to minimize total logistics costs.

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An Application of a Cost Minimization Model in Determining Safety Stock Level and Location.

Bahareh Amirjabbari
Bahareh Amirjabbari Concordia University
Nadia Bhuiyan
Nadia Bhuiyan

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