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Inventory Minimization and Production Scheduling: the Case of a Large Hong Kong Company
Author(s) -
Chu Sydney C.K.
Publication year - 1994
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/1475-3995.d01-39
Subject(s) - scheduling (production processes) , computer science , operations research , production planning , inventory control , finished good , production (economics) , operations management , business , economics , microeconomics , engineering
The background of this study is a rather classical but complex inventory control/production planning/line scheduling problem of a major soft‐drink company in Hong Kong. The issue that stands out for this many‐product high‐sales manufacturer is the storage space of its central warehouse, which often finds itself in the state of overflow or near capacity with finished goods and work‐in‐process inventory. This phenomenon can create immediate interruptions of production, capital tie‐ups and subsequent potential of lost sales. Another obviously important concern is the meeting of forecast demands. A mathematical modelling approach that entails techniques of multi‐period aggregate optimization is proposed to tackle the overall problem. The dual objectives are to achieve better production planning and line scheduling in order to minimize inventory build‐up and maximize demand satisfaction. Numerical results for a sample problem are reported as an illustration to this proposed two‐phase approach.