The impact of inventory holding costs on the strategic design of supply chains
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| Format: | Artículo científico |
| Language: | en |
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Universidad de Antioquia
2021
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| author | Liliana Bolaños-Zúñiga |
| author_facet | Liliana Bolaños-Zúñiga |
| contents | The impact of inventory holding costs on the strategic design of supply chains Liliana Bolaños-Zúñiga Carlos Julio Vidal-Holguín Ingeniería inventories optimization Network analysis simulation models The explicit consideration of inventory holding costs for the strategic design of supply chains has not been sufficiently addressed in scientific literature. A possible cause is that usually supply chain optimization models are deterministic and linear or mixed-integer linear, while forecasting methods and inventory control systems are stochastic and non-linear. It is clear, however, that inventory costs might have a significant impact on optimal supply chain configuration and on distribution systems expansion or contraction. This article presents a practical strategy that considers an item-by-item inventory control system by means of a Monte Carlo simulation model as a starting point to include inventory holding costs in a supply chain optimization model. Three strategies to include inventory costs in the objective function were analyzed: The Square Root Law (SRL), the potential functions that relate average inventory with warehouse throughput, and the estimation of average inventories by simulation. The results suggest that the SRL should not be used unless unusual assumptions hold and that potential functions are a very good approximation to consider inventory costs for supply chain configuration. 2021 artículo científico 0120-6230 https://www.redalyc.org/articulo.oa?id=43068839005 https://www.redalyc.org/journal/430/43068839005/ https://www.redalyc.org/journal/430/43068839005/html/ https://www.redalyc.org/journal/430/43068839005/43068839005.epub https://www.redalyc.org/journal/430/43068839005/movil 10.17533/udea.redin.20200692 en http://www.redalyc.org/revista.oa?id=430 Revista Facultad de Ingeniería Universidad de Antioquia application/pdf Universidad de Antioquia Revista Facultad de Ingeniería Universidad de Antioquia (Colombia) Num.101 |
| format | Artículo científico |
| id | redalyc_43068839005 |
| institution | Redalyc |
| language | en |
| publishDate | 2021 |
| publisher | Universidad de Antioquia |
| spellingShingle | The impact of inventory holding costs on the strategic design of supply chains Liliana Bolaños-Zúñiga Ingeniería inventories optimization Network analysis simulation models The impact of inventory holding costs on the strategic design of supply chains Liliana Bolaños-Zúñiga Carlos Julio Vidal-Holguín Ingeniería inventories optimization Network analysis simulation models The explicit consideration of inventory holding costs for the strategic design of supply chains has not been sufficiently addressed in scientific literature. A possible cause is that usually supply chain optimization models are deterministic and linear or mixed-integer linear, while forecasting methods and inventory control systems are stochastic and non-linear. It is clear, however, that inventory costs might have a significant impact on optimal supply chain configuration and on distribution systems expansion or contraction. This article presents a practical strategy that considers an item-by-item inventory control system by means of a Monte Carlo simulation model as a starting point to include inventory holding costs in a supply chain optimization model. Three strategies to include inventory costs in the objective function were analyzed: The Square Root Law (SRL), the potential functions that relate average inventory with warehouse throughput, and the estimation of average inventories by simulation. The results suggest that the SRL should not be used unless unusual assumptions hold and that potential functions are a very good approximation to consider inventory costs for supply chain configuration. 2021 artículo científico 0120-6230 https://www.redalyc.org/articulo.oa?id=43068839005 https://www.redalyc.org/journal/430/43068839005/ https://www.redalyc.org/journal/430/43068839005/html/ https://www.redalyc.org/journal/430/43068839005/43068839005.epub https://www.redalyc.org/journal/430/43068839005/movil 10.17533/udea.redin.20200692 en http://www.redalyc.org/revista.oa?id=430 Revista Facultad de Ingeniería Universidad de Antioquia application/pdf Universidad de Antioquia Revista Facultad de Ingeniería Universidad de Antioquia (Colombia) Num.101 |
| title | The impact of inventory holding costs on the strategic design of supply chains |
| topic | Ingeniería inventories optimization Network analysis simulation models |
| url | https://www.redalyc.org/articulo.oa?id=43068839005 https://www.redalyc.org/journal/430/43068839005/ https://www.redalyc.org/journal/430/43068839005/html/ https://www.redalyc.org/journal/430/43068839005/43068839005.epub https://www.redalyc.org/journal/430/43068839005/movil |