Dynamic Safety-Stock Calculation

Authors: Julian Becker, Wiebke Hartmann, Sebastian Bertsch, Johannes Nywlt, Matthias Schmidt

Abstract:

In order to ensure a high service level industrial enterprises have to maintain safety-stock that directly influences the economic efficiency at the same time. This paper analyses established mathematical methods to calculate safety-stock. Therefore, the performance measured in stock and service level is appraised and the limits of several methods are depicted. Afterwards, a new dynamic approach is presented to gain an extensive method to calculate safety-stock that also takes the knowledge of future volatility into account.

Keywords: Inventory dimensioning, material requirement planning, safety-stock calculation.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1088544

References:

[1] M. A. Karim, P. Samaranayake, A. J. R.Smith, and S. K. Halgamugec, “An on-time delivery improvement model for manufacturing organisations,” International Journal of Production Research, vol. 48, no. 8, 2010, pp. 2373–2394.
[2] K. K. B. Hon, 2005, Performance and Evaluation of Manufacturing Systems, Annals of the CIRP 54/2: 139-154.
[3] A. J. Ruiz-Torres, F. Mahmoodi, 2010, Safety stock determination based on parametric lead time and demand information, International Journal of Production Research, 48/10: 2841–2857.
[4] W. J. Hopp and M. L. Spearman, Factory physics, 3rd ed., Boston et al.: McGraw-Hill/Irwin, 2009.
[5] K. Alicke, 2005, Planung und Betrieb von Logistiknetzwerken, 2nd ed., Springer
[6] S. Axsäter, 2006, Inventory Control, 2nd ed., Springer.
[7] M. Z. Babai, A. A. Syntetos, Y. Dallery, K. Nikolopoulos, 2009, Dynamic re-order point inventory control with lead-time uncertainty: analysis and empirical investigation, International Journal of Production Research, 47/9: 2461-2483.
[8] J. J. Kanet, M. F. Gorman, M. Stößlein, 2010, Dynamic planned safety stocks in supply networks, International Journal of Production Research, 48/22: 6859–6880.
[9] T. Gudehus, H. Kotzab, 2008, Comprehensive Logistics, Springer.
[10] W. Hartmann, M. Schmidt, P. Nyhuis, „Dynamic Inventory Dimensioning”, 2011 African Conference on Software Engineering and Applied Computing, 18.-23. September 2011, Cape Town.
[11] M. Schmidt, W. Hartmann, P. Nyhuis, „Simulation Bbased comparison of safety-stock calculation methods,“ CIRP Annals - Manufacturing Technology 61 (1), pp. 403–406.
[12] K. Inderfurth, T. Jensen, 2008, Lagerbestandsmanagement, in: Arnold, D. (Ed.), Handbuch Logistik, Springer, 153-167.
[13] F. Herrmann, 2011, Operative Planung in IT-Systemen für die Produktionsplanung und-steuerung, Vieweg + Teubner.
[14] T. Gudehus, 2006, Dynamische Disposition, 2nd ed., Springer.
[15] S. Lutz, H. Lödding,H.-P. Wiendahl, 2003, Logistics-oriented inventory analysis, International Journal of Production Economics, 85: 217–231.
[16] H. Tempelmeier, L. Fischer, 2010, Approximation of the probability distribution of the customer waiting time under an (r, s, q) inventory policy in discrete time, International Journal of Production Research, 48/21: 6275–6291.
[17] F. W. Harris, 1913, How Many Parts to Make at Once, The Magazine of Management, 10/2: 135-136.
[18] B. Stausberg, 1992, Entwicklung eines Verfahrens zur Berechnung notwendiger Sicherheitsbestände unter Berücksichtigung realer Verteilungen für Lagerabgang und Wiederbeschaffungszeit mit Hilfe von Konfidenzbereichen, Schlußbericht zum DFG-Forschungsvorhaben Ha 531/65-1, FIR e.V., RWTH Aachen.
[19] H. Tempelmeier, 2011, Inventory management in supply networks, 2nd ed., Books on Demand.