Thesis (M.B.A.)--Boston University

The following thesis is based on a study on warehousing for an inventory of finished goods at Volvo Construction Equipment in Eskilstuna.   The inventory stores components consisting axles and transmissions. The project portrays a current situation analysis based on collected primary data, in form of interviews and observations. The current situation analysis includes a detailed process mapping, different warehouse layouts along with calculations. These aspects have been used in the development of improvement propositions.   The company is currently required to deliver components according to FIFO (First In, First Out), that is therefore fundamental when designing the following thesis. The project has however not been based on implementing FIFO, but only improving the existing management of FIFO. The current way of working with FIFO at the company is not ideal, consequently contributed to lack of storage space. This has eventually led to some components being stored outside the warehouse. It means that the components will not be weather-protected, which is one of the aspects that the company wishes to improve.   The Authors have presented various improvement propositions consisting investing in a: pallet, mobile- and a push back racking system and an improved inventory layout. These suggestions have been compared based on various factors that could be prioritized by the company. Examples on these key factors are: cost, volume utilization and enforcement of FIFO. The cost analysis for the racking systems are based on assistance from suppliers that has led to an enhanced cost comparison. The presented propositions have been delimited to ultimately being able to decide the final suggestion. For further studies, the company is recommended to invest in a pallet racking system, which is not only a beneficial economical solution, but also solves space shortage while all the components are stored with weather- protection. This will ultimately lead to improvement on managing FIFO in the finished goods inventory that the company strives after. / Detta examensarbete är grundat på undersökningar inom lagerhanteringen i färdigvarulagret (FVL) på Volvo Construction Equipment i Eskilstuna.   Färdigvarulagret lagerhåller i dagsläget komponenter bestående av axlar och transmissioner. Detta arbete redogör en nulägesbeskrivning som har tagits fram med hjälp av insamlad primärdata, i form av intervjuer och observationer. Nulägesbeskrivningen innefattar bland annat en detaljerad processkartläggning, olika lagerlayouts samt beräkningar som har varit fördelaktigt vid framtagandet av förbättringsförslagen. Den insamlade primärdata har jämförts med den teoretiska referensramen, som har varit till stöd vid utformningen av förslagen.   Företaget har i dagsläget krav på att leverera komponenter enligt FIFO (First In, First Out), som därmed är grunden till examensarbetet. Detta arbete har inte utgått från att implementera FIFO, utan att endast förbättra den befintliga hanteringen. Dagens arbetssätt av FIFO är inte optimal, i och med att det har bidragit till platsbrist i lagret. Detta har lett till att vissa komponenter lagerhålls i ett utelager som är placerat utanför FVL. Komponenterna som lagras i utelagret blir inte väderskyddade, vilket är en av de faktorer som företaget vill lösa.   Författarna har tagit fram olika förbättringsförslag bestående av införandet av ett: mobilt-, pall och rullfackställage, eller en ny lagerlayout. Dessa förslag har jämförts utifrån olika faktorer som författarna anser att företaget bör prioritera. Exempel på väsentliga faktorer som förslagen innefattar är bland annat kostnadsaspekten, volymutnyttjandet och tillämpningen av FIFO. Kostnadsförslagen för lagersystemen är framtagna utifrån stöd från leverantörer, vilket lett till en tydligare kostnadsjämförelse. Utifrån de presenterade förbättringsförslagen, har dessa avgränsats för att till slut kunna komma fram till ett slutgiltigt val. Vid fortsatta studier kring arbetet rekommenderas företaget att investera i ett pallställage som inte endast är en ekonomisk lösning, utan som dessutom löser platsbristen i lagret. Samtidigt lagerhålls samtliga komponenter med väderskydd. Detta kommer slutligen leda till en förbättrad FIFO hantering i FVL som företaget eftersträvar.

M.Tech. (Industrial Engineering) / This research investigates the influence of supply chain visibility on the performance of inventory management. A mixed method approach was used in this study. A questionnaire was used to collect data that was statistically analysed; interviews were carried out to supplement in-depth understanding of inventory management practices. The research study used the four constructs of supply chain visibility as proposed in the literature which are visibility for sensing, visibility for learning, visibility for coordinating and visibility for integrating. Data obtained was analysed mainly through correlation and mean score analysis. The results from the study demonstrated that 42% of the variance in the performance of inventory management was explained by the two constructs of supply chain visibility that’s coordinating and integrating at a statistical confidence of 95%. The study could not establish the influence of sensing and learning on the performance of inventory management. The paper contributes to the body of knowledge of supply chain visibility variables that can be associated with the performance of inventory management. The survey was done on a small population in one manufacturing company impacting negatively on the generalisation of the results.

For inventory models minimizing the long-run average cost over an infinite horizon, the existence of optimal policies was an open question for a long time. Consider a deterministic, continuous time inventory system satisfies the following conditions: the production network is acyclic, the joint setup cost function is monotone, the holding cost and the backlogging cost rates are nonnegative, the demand rates are constant over time, the production rates are infinite or finite non-increasing, and backlogging may be allowed or not. For this very general extension of the Wilson-Harris EOQ model, we prove the existence of optimal policies. Very few properties of optimal policies have been discovered since the 1950's. Restricting the above inventory model to infinite production rates, we present some new properties of optimal policies, such as the Latest Ordering Property, and explicit expressions for echelon inventories and order quantities in terms of ordering instants. An assembly production system with n facilities has a constant external demand occurring at the end facility. Production rates at each facility are finite and non-increasing along any path in the assembly network. Associated with each facility are a set-up cost and positive echelon holding cost rate. The formulation of the lot-sizing problem is developed in terms of integer-ratio lot size policies. This formulation provides a unification of the integer-split policies formulation of Schwarz and Schrage [34] (1975) and the integer-multiple policies formulation of Moily [20] (1986), allowing either assumption to be operative at any point in the system. A relaxed solution to this unified formulation provides a lower bound to the cost of any feasible policy. The derivation of this Lower Bound Theorem is novel and relies on the notion of path holding costs, a generalization of echelon holding costs. An optimal power-of-two lot size policy is found by an 0(n³ log n) algorithm and its cost is within 2% of the optimum in the worst case. Mitchell [18] (1987) extended Roundy's 98%-effectiveness results for one-warehouse multi-retailer inventory systems with backlogging. We extend this 98%-effectiveness result for series inventory systems with backlogging. The nearly-integer-ratio policies still work. The continuous relaxation provides a lower bound on the long-run average cost of any feasible policy. The backlogging model is also reduced in 0{n) time to an equivalent model without backlogging. Roundy's results [27] (1983) are then applied for finding a 98%-effective backlogging policy in O(nlogn) time. In an EOQ model with n products, joint setup costs provide incentives for joint replenishment. These joint setup costs may be modelled as a positive, nondecreasing, submodular set function. A grouping heuristic partitions the n products into groups, and all products in the same group are always jointly replenished. Each group is then considered as a single "aggregate product" being replenished independently of the other groups, and therefore according to the EOQ formula. As a result, possible savings when several groups are simultaneously replenished are simply ignored. Our main result is that the cost of the best such grouping solution cannot be worse than 44.8% above the optimum cost. Known examples show that it can be as bad as 22.4% above the optimum cost. These results contrast with earlier results for power-of-two policies, the best of which never being worse than about 2% above the optimum cost. / Business, Sauder School of / Graduate

This thesis identifies the potential net economic gains from substituting less costly transit for relatively costly parts inventory through pipeline reduction. The analysis considers long run steady state economic implications of adjusting the current mix of inventory investments and transportation expenses. The scope of the analysis is focused on a case study of Department of Defense (DoD) parts inventories within the US. The inventory scope is limited to high cost low priority, non-mission critical, replenishment parts (engines, electronics, assemblies and components, etc.). The study uses baseline data collected over 9 months from over 200 inventory sites on thousands of parts. Pipeline reductions are achieved by replacing the current 6 day transit time with a conservative 3 day commercial carrier (e.g., UPS, DHL, Emory Air, etc.). Warehouses in the case study automatically lower inventory levels in response to lowered transit times to prevent inventory buildup. These lower inventory levels will generate reductions in inventory investment and associated holding costs. The reductions in these inventory costs are compared to the increases in transportation expenses to generate benefit to cost ratios. / Master of Arts

We look at some inventory models for dual channel retailers who fulfill demands from both channels from the same pool of stock. Since the arrival of the internet, companies, particularly retailers, have been trying to figure out how best to take advantage of this new channel. This became acute for retailers when Amazon.com became the pre-dominant bookseller overcoming rivals like Barnes and Noble and Borders who had been operating for several decades. Firms in other categories were worried that a web only retailer like Amazon.com could end up dominating their sectors as well. To respond to such threats, existing retailers like Tesco and Lands End began offering their products through a web-site which became their web channel. To improve efficiency and to take advantage of specific characteristics of this channel, firms had to modify the operations of their existing channels. In this thesis, we look at retailers who took advantage of the web channel to better their operations for the entire firm. / Thesis / Doctor of Business Administration (DBA)

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