A dissertation submitted to the Faculty of Engineering, University of the Witwatersrand, Johannesburg, in fulfilment of requirements for the degree of Master of Science in Engineering. Johannesburg, November 1994. / Inventories are produced, used (e.g. for raw materials, supplies, spare parts, and So forth) or
distributed by every organisation. Moreover, inventories represent a major investment from the
perspectives of both individual firms and entire national economies. In addition, enormous costs
are incurred in the planning, scheduling, control and actual carrying out of
replenlshment-Iprocuretnentl related activities.
Interest in the subject of inventory management is constantly increasing, yet Silver and
Petarsonlll (P(eface) found that "although invi ,~ory management ha.l been studied in
considerable depth from a theoretical perspective, yet, those of us who, throuah consulting
work, come into. clos>!)contact with mananerlal decision procedures in this arer are repeatedly
surprised to find how limited, and ad hoc, many of the existing decision systems actually are.
The rate at which theory has been developed has far outstripped the rate at which decision
practices of firms have been successft,Jlly upgraded. A major g~o has existed between the
theoretical solutions, on the one hand, and the real world problems, on the other".
Inventory control is the science-based art of ensuring that lust enough inventory (or stockl is
held by an organisation to meet both its internal and external demand commitments
economically. There can be disadvantages in holding either too much 01 too little inventory.
Therefore, inventory control is primarily concerned with obtaining the correct inventory with
compromise between these two extremes.
The control and maintenance of inventories is a problem common to all enterprises in any sector
of a given economy. The primary aim of this study is to identify What the inventory policy of a
company shoull;I be to Secure a reduction in inventory-related costs while maintaining a high
level of customer service.
Lewis(2) defines two bMlt:~ tvpes of inventory policy. Those in which decisions concerning
replenishment are based on the lellel of inventory held, are known as "fixed-order quantity
models" or "re-order level policies" and those in which such declslons arc made on a time basis
are known as "fixed-time period models" or "re-order cycle policies". According to Nadder(3)
(7I 11) the basic distinction between fixed-order quantity models and fixed-tlme period models
is that the former are "event-triggered" while the latter are "time-triggered". That is, a
fixed-order quantity model initiates an order when the "event" of reaching a specified re-order
level occurs. This event may take place at any time, depending on the demand for the items
considered. In contrast, the fixed-time period model is limited to placing orders at the end of a
predetermined time period; hence, the passage of time alone "triggers" the model.
In this thesis, we shall discuss both classical inventory models and heuristic models. We shall
also conduct an investigation into the factors affecting high levels of inventory ~ mainly lead
times (supplier and internal lea' times) in relation to spare 9arts in the heavv-dutv truck and bus
industry. The thesis also suggests guidelines for controlling stock or these types of commodities
in a practical environment. This will be done by either researching the existing inventory models
or developing new inventory models or a combination of both, the intention being not to look for
absolute optimisation, but rather to achieve significant improvements over current operations. / GR 2016
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/21323 |
| Date | January 1994 |
| Creators | Azran, Simon |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | Online resource (205 leaves), application/pdf |
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