Multi-stage Inventory Management and Transportation Planning

Abstract

Effective inventory management enables us to meet customer demand by ensuring the delivery of the right products that customers need on time. Likewise the correct design of the supply chain contributes to the effectiveness of stock management. Companies increase customer satisfaction by making effective stock planning. A petroleum company which located in Izmir also aims at accurate and effective stock management. The company decides to determine the product variety and product quantity that should be in the stocks of the micro warehouses to be established in 5 different regions. In this study our objectives are (i) to identify which product should be stored at each micro depot based on the demand forecasting model we develop (ii) to allocate storage capacities to the products (iii) to determine ordering instances and (iv) to conduct an optimal aggregate transportation plan with the given fleet size of different vehicles. The most demanded products for each region were determined by performing ABC analysis with 2 criteria. Since the products selected according to the ABC analysis will be transported to the micro warehouses by 3 different types of vehicles a transportation planning model has been constructed. In order to decide on the ordering policy of the specified products in the micro warehouses 2 different dynamic simulation models were created on a unit basis and on a pallet basis by using the Arena Simulation program with the objective of satisfying a certain service level. © 2024 Elsevier B.V. All rights reserved.