Echelon-based Inventory Monitoring Schemes in Convergent Supply Chain
Date Issued
2009
Date
2009
Author(s)
Huang, Shou-Ching
Abstract
Confronting the variable market demand and the global competition, enterprises must do the plan based on the entire supply chain view, so they can make end products more competitive. For a production system, WIP inventory is a good index to monitor. If WIP inventory control limits of the system are set appropriately, the influence of production variations would be reduced and the target service level would be reached. The upstream stage of convergent supply chain has more then one member. They produce different semi-finished products with different finish time, and then transfer to the downstream factory to assembly. Also, there are many uncertainties during production processes. The above mentioned characters make the convergent supply chain hard to be managed. Previous researches which mostly focus on the sequent supply chain. Differently, this research focuses on the property of convergent supply chain, that is, multiple suppliers and one assembly factory. This research also attempts to develop a supply chain monitoring scheme based on the concepts of echelon WIP inventory and CONWIP system. The first step in the proposed scheme is to decide the planned lead time of each stage. Then we take the features of uncertainties of production into consideration, and construct a two-echelon model which has two suppliers and one assembly factory. Simultaneously, under the service level constraints, this model is constructed with the goal of minimizing the echelon WIP inventory control limits of the supply chain. In addition, the model is extended to have multiple suppliers and one assembly factory. Finally, an algorithm which solves the developed model is provided by utilizing the property of the positive relationship between standardized WIP inventory control limits and supply chain service level. With the resulting echelon WIP inventory control limits from the model, the proposed monitoring scheme has been validated through the simulation. Conclusions are drawn as follows:1) By the algorithm, the proposed scheme can effectively derive the two-echelon WIP inventory limits, which is lower than the stage-based WIP inventory limits of the supply chain.2) The proposed echelon-based monitoring scheme can obtain a higher service level under the lower inventory levels.
Subjects
Convergent Supply Chain
Echelon WIP Inventory
Type
thesis
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