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Raw material replenishment policies in a production system with regular and occasional suppliers

Volani Natalia

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URI: http://purl.tuc.gr/dl/dias/BE482292-2920-4949-98EB-09A04F88529A
Year 2015
Type of Item Diploma Work
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Bibliographic Citation Ναταλία Βολάνη, "Πολιτικές αναπλήρωσης αποθέματος πρώτων υλών σε σύστημα παραγωγής με τακτικούς και ευκαιριακούς προμηθευτές", Διπλωματική Εργασία, Σχολή Μηχανικών Παραγωγής και Διοίκησης, Πολυτεχνείο Κρήτης, Χανιά, Ελλάς, 2015 https://doi.org/10.26233/heallink.tuc.27851
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Summary

The present thesis examines a production system receiving raw materials and/or outsourced components from regular and occasional suppliers and dispenses them into the market. The required demand has a given mean value but is stochastic. For instance, the daily demand follows unpredictable fluctuations depending on its daily mean value, which is considered known. The company has one or more regular raw material suppliers, supplying it with products in an appointed price. In case occassional suppliers were absent, the company could formulate the raw material replenishment policy maximizing the average profit rate (annual profit or overall profit/unit of time) based on the purchase prices of the raw materials and the selling prices of the products, the statistical parameters of the demand (median, variance), the market investment cost and, possibly, the holding cost of the raw material inventory and the production cost. The problem for the company is the following. The company randomly receives an offer from an occassional supplier in a price which is, as a rule, lower than the standard price provided by the regular suppliers. Furthermore, the occasional supplier offer an obligatory given (maximum) quantity to be purchased at a specific (low) price, which has the form of a “one time deal” or “one time discount”. The company already has a raw material inventory at the specific time when the discount offer appears, and most probably, also expects arrivals of pending orders from the regular suppliers (pipeline inventory). Should the company accept the one time deal? In case the raw material inventory on hand is low and taking into consideration that it does not exceed the properly optimized upper limits defined by the company, then the acceptance of the offer is convenient. In the opposite case where the inventory on hand is already high, the occassional offer is not accepted due to the high holding costs of the surplus inventory. The present thesis examines how occasional supplies affect inventory policies, as well as which is the optimized combination of parameters ensuring the maximization of profit.

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