DETERMINATION OF THE COST-EFFECTIVE LOT-SIZING TECHNIQUE FOR PERISHABLE GOODS: A CASE STUDY

Year 2021, Volume: 5 Issue: 9, 33 - 46, 25.02.2021

Ayten Yılmaz Yalçıner

Abstract

Determining the exact needs to meet the demand in manufacturing enterprises is an important factor in terms of the efficiency of the production environment. Businesses can make accurate decisions about which material to order in what quantity through the Material Requirements Planning system. At this point, the methods used in determining lot-size are among the effective tools in order amount decision. One of the sectors where material order quantities are critical is the food sector, as it includes perishable goods.

In this paper, it is aimed to determine the cost-effective lot- sizing method that will minimize the cost for an enterprise producing gum which is a perishable goods. For this purpose, 10 different lot-sizing methods were used for three different products with real data obtained from a company produces gum. The performances of the techniques were evaluated. A comparison was made for three types of gum in terms of number of orders, order cost, holding cost and total cost according to the cases with and without shelf life constraints and the method that minimizes the total cost was sought. When the results of the study were considered, it was seen that different methods yielded the cost-effective results for the cases with and without shelf-life constraints pertaining to the criteria of the number of orders, order cost, inventory holding cost and total cost criteria. However, it has been observed that the multi-echelon optimization method created to be peculiar to the firm yielded the result with a lower cost than the others.

Keywords

Lot-sizing techniques, perishable goods, shelf life, MRP

References

• Abad, P.L. (2003), Optimal pricing and lot-sizing under conditions of perishability, finite production and partial backordering and lost sale, European Journal of Operational Research 144, s. 677–685.