Research Article
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An Inventory Optimization Model for a Textile Manufacturing Company

Year 2022, , 1252 - 1262, 31.12.2022
https://doi.org/10.56554/jtom.1106406

Abstract

Inventory management is a crucial issue in most businesses from factories in industry to small and large organizations in the production or service sector. A company should determine an optimum inventory level between excessive inventory that takes up physical space, costs much, and lack of inventory which disrupts the supply chain causing unavailability of the product that makes customers change their idea and buy from another supplier.
In this study, we first classify the items that the company manufactures by using ABC analysis and develop a mathematical model to minimize total cost to enable a better inventory management. We use ABC analysis method to evaluate products in a textile company in terms of importance and to track these products according to their priorities. Accordingly, we propose a mixed integer programming model to determine production quantities and inventory levels with minimum cost. The results shows that the company in concern can improve its total production and inventory costs by 3.8 percent.

References

  • Addy-Tayie, N. (2012). Improving Warehouse and Inventory Management: Operational Efficiency and Transport Safety
  • Alawneh, F., & Zhang, G. (2018). Dual-channel warehouse and inventory management with stochastic demand. Transportation Research Part E: Logistics and Transportation Review, 112, 84-106.
  • Ancarani, A., Di Mauro, C., & D’Urso, D. (2016). Measuring overconfidence in inventory management decisions. Journal of Purchasing and Supply Management, 22(3), 171-180. Armour, G. C., & Buffa, E. S. (1963). A heuristic algorithm and simulation approach to relative location of facilities. Management science, 9(2), 294-309.
  • Balcik, B., Bozkir, C. D. C., & Kundakcioglu, O. E. (2016). A literature review on inventory management in humanitarian supply chains. Surveys in Operations Research and Management Science, 21(2), 101-116.
  • Chandra, S., Christiansen, M., & Fagerholt, K. (2016). Combined fleet deployment and inventory management in roll-on/roll-off shipping. Transportation Research Part E: Logistics and Transportation Review, 92, 43-55.
  • Corporation, G. D. (2010). General Algebraic Modeling System (GAMS). In (Version 23.5.1)
  • Dabiri, N., Tarokh, M. J., & Alinaghian, M. (2017). New mathematical model for the bi-objective inventory routing problem with a step cost function: A multi-objective particle swarm optimization solution approach. Applied Mathematical Modelling, 49, 302-318.
  • Dai, Z., Aqlan, F., & Gao, K. (2017). Optimizing multi-echelon inventory with three types of demand in supply chain. Transportation Research Part E: Logistics and Transportation Review, 107, 141-177.
  • Ehrhardt, R. (1979). The power approximation for computing (s, S) inventory policies. Management science, 25(8), 777-786.
  • Eissa, M., & Rashed, E. (2020). Application of statistical process optimization tools in inventory management of goods quality: suppliers evaluation in healthcare facility. Journal of Turkish Operations Management, 4(1), 388-408.
  • Fiestras-Janeiro, M. G., García-Jurado, I., Meca, A., & Mosquera, M. A. (2011). Cooperative game theory and inventory management. European Journal of Operational Research, 210(3), 459-466.
  • García-Alvarado, M., Paquet, M., Chaabane, A., & Amodeo, L. (2017). Inventory management under joint product recovery and cap-and-trade constraints. Journal of cleaner Production, 167, 1499-1517.
  • Herron, D. (1976). Industrial engineering applications of ABC curves. AIIE Transactions, 8(2), 210-218.
  • Janssen, F., Heuts, R., & de Kok, T. (1999). The impact of data collection on fill rate performance in the (R, s, Q) inventory model. Journal of the Operational Research Society, 50(1), 75-84.
  • Koumanakos, D. P. (2008). The effect of inventory management on firm performance. International journal of productivity and performance management.
  • Li, Z., & Fu, Q. G. (2017). Robust inventory management with stock-out substitution. International Journal of Production Economics, 193, 813-826.
  • Moradi, S., & MirHassani, S. (2015). Transportation planning for petroleum products and integrated inventory management. Applied Mathematical Modelling, 39(23-24), 7630-7642.
  • Pandya, B., & Thakkar, H. (2016). A review on inventory management control techniques: ABC-XYZ analysis. REST Journal on Emerging trends in Modelling and Manufacturing, 2, 15.
  • Poppe, J., Basten, R. J., Boute, R. N., & Lambrecht, M. R. (2017). Numerical study of inventory management under various maintenance policies. Reliability Engineering & System Safety, 168, 262-273.
  • Qiu, Y., Qiao, J., & Pardalos, P. M. (2019). Optimal production, replenishment, delivery, routing and inventory management policies for products with perishable inventory. Omega, 82, 193-204.
  • Rahdar, M., Wang, L., & Hu, G. (2018). A tri-level optimization model for inventory control with uncertain demand and lead time. International Journal of Production Economics, 195, 96-105.
  • Scarf, H. (1960). The optimality of (S, s) policies in the dynamic inventory problem.
  • Siddiqui, A., Verma, M., & Verter, V. (2018). An integrated framework for inventory management and transportation of refined petroleum products: Pipeline or marine? Applied Mathematical Modelling, 55, 224-247.
  • Silver, E. A., & Peterson, R. (1985). Decision systems for inventory management and production planning (Vol. 18). Wiley.
  • Torkul, O., Yılmaz, R., Selvi, İ. H., & Cesur, M. R. (2016). A real-time inventory model to manage variance of demand for decreasing inventory holding cost. Computers & Industrial Engineering, 102, 435-439.
  • Wild, T. (2017). Best practice in inventory management. Routledge.
Year 2022, , 1252 - 1262, 31.12.2022
https://doi.org/10.56554/jtom.1106406

Abstract

References

  • Addy-Tayie, N. (2012). Improving Warehouse and Inventory Management: Operational Efficiency and Transport Safety
  • Alawneh, F., & Zhang, G. (2018). Dual-channel warehouse and inventory management with stochastic demand. Transportation Research Part E: Logistics and Transportation Review, 112, 84-106.
  • Ancarani, A., Di Mauro, C., & D’Urso, D. (2016). Measuring overconfidence in inventory management decisions. Journal of Purchasing and Supply Management, 22(3), 171-180. Armour, G. C., & Buffa, E. S. (1963). A heuristic algorithm and simulation approach to relative location of facilities. Management science, 9(2), 294-309.
  • Balcik, B., Bozkir, C. D. C., & Kundakcioglu, O. E. (2016). A literature review on inventory management in humanitarian supply chains. Surveys in Operations Research and Management Science, 21(2), 101-116.
  • Chandra, S., Christiansen, M., & Fagerholt, K. (2016). Combined fleet deployment and inventory management in roll-on/roll-off shipping. Transportation Research Part E: Logistics and Transportation Review, 92, 43-55.
  • Corporation, G. D. (2010). General Algebraic Modeling System (GAMS). In (Version 23.5.1)
  • Dabiri, N., Tarokh, M. J., & Alinaghian, M. (2017). New mathematical model for the bi-objective inventory routing problem with a step cost function: A multi-objective particle swarm optimization solution approach. Applied Mathematical Modelling, 49, 302-318.
  • Dai, Z., Aqlan, F., & Gao, K. (2017). Optimizing multi-echelon inventory with three types of demand in supply chain. Transportation Research Part E: Logistics and Transportation Review, 107, 141-177.
  • Ehrhardt, R. (1979). The power approximation for computing (s, S) inventory policies. Management science, 25(8), 777-786.
  • Eissa, M., & Rashed, E. (2020). Application of statistical process optimization tools in inventory management of goods quality: suppliers evaluation in healthcare facility. Journal of Turkish Operations Management, 4(1), 388-408.
  • Fiestras-Janeiro, M. G., García-Jurado, I., Meca, A., & Mosquera, M. A. (2011). Cooperative game theory and inventory management. European Journal of Operational Research, 210(3), 459-466.
  • García-Alvarado, M., Paquet, M., Chaabane, A., & Amodeo, L. (2017). Inventory management under joint product recovery and cap-and-trade constraints. Journal of cleaner Production, 167, 1499-1517.
  • Herron, D. (1976). Industrial engineering applications of ABC curves. AIIE Transactions, 8(2), 210-218.
  • Janssen, F., Heuts, R., & de Kok, T. (1999). The impact of data collection on fill rate performance in the (R, s, Q) inventory model. Journal of the Operational Research Society, 50(1), 75-84.
  • Koumanakos, D. P. (2008). The effect of inventory management on firm performance. International journal of productivity and performance management.
  • Li, Z., & Fu, Q. G. (2017). Robust inventory management with stock-out substitution. International Journal of Production Economics, 193, 813-826.
  • Moradi, S., & MirHassani, S. (2015). Transportation planning for petroleum products and integrated inventory management. Applied Mathematical Modelling, 39(23-24), 7630-7642.
  • Pandya, B., & Thakkar, H. (2016). A review on inventory management control techniques: ABC-XYZ analysis. REST Journal on Emerging trends in Modelling and Manufacturing, 2, 15.
  • Poppe, J., Basten, R. J., Boute, R. N., & Lambrecht, M. R. (2017). Numerical study of inventory management under various maintenance policies. Reliability Engineering & System Safety, 168, 262-273.
  • Qiu, Y., Qiao, J., & Pardalos, P. M. (2019). Optimal production, replenishment, delivery, routing and inventory management policies for products with perishable inventory. Omega, 82, 193-204.
  • Rahdar, M., Wang, L., & Hu, G. (2018). A tri-level optimization model for inventory control with uncertain demand and lead time. International Journal of Production Economics, 195, 96-105.
  • Scarf, H. (1960). The optimality of (S, s) policies in the dynamic inventory problem.
  • Siddiqui, A., Verma, M., & Verter, V. (2018). An integrated framework for inventory management and transportation of refined petroleum products: Pipeline or marine? Applied Mathematical Modelling, 55, 224-247.
  • Silver, E. A., & Peterson, R. (1985). Decision systems for inventory management and production planning (Vol. 18). Wiley.
  • Torkul, O., Yılmaz, R., Selvi, İ. H., & Cesur, M. R. (2016). A real-time inventory model to manage variance of demand for decreasing inventory holding cost. Computers & Industrial Engineering, 102, 435-439.
  • Wild, T. (2017). Best practice in inventory management. Routledge.
There are 26 citations in total.

Details

Primary Language English
Subjects Industrial Engineering
Journal Section Research Article
Authors

Adem Pınar 0000-0003-0471-7204

Durdu Hakan Utku 0000-0002-5755-6101

Fatih Kasımoğlu 0000-0001-5818-9342

Publication Date December 31, 2022
Submission Date April 20, 2022
Acceptance Date July 7, 2022
Published in Issue Year 2022

Cite

APA Pınar, A., Utku, D. H., & Kasımoğlu, F. (2022). An Inventory Optimization Model for a Textile Manufacturing Company. Journal of Turkish Operations Management, 6(2), 1252-1262. https://doi.org/10.56554/jtom.1106406
AMA Pınar A, Utku DH, Kasımoğlu F. An Inventory Optimization Model for a Textile Manufacturing Company. JTOM. December 2022;6(2):1252-1262. doi:10.56554/jtom.1106406
Chicago Pınar, Adem, Durdu Hakan Utku, and Fatih Kasımoğlu. “An Inventory Optimization Model for a Textile Manufacturing Company”. Journal of Turkish Operations Management 6, no. 2 (December 2022): 1252-62. https://doi.org/10.56554/jtom.1106406.
EndNote Pınar A, Utku DH, Kasımoğlu F (December 1, 2022) An Inventory Optimization Model for a Textile Manufacturing Company. Journal of Turkish Operations Management 6 2 1252–1262.
IEEE A. Pınar, D. H. Utku, and F. Kasımoğlu, “An Inventory Optimization Model for a Textile Manufacturing Company”, JTOM, vol. 6, no. 2, pp. 1252–1262, 2022, doi: 10.56554/jtom.1106406.
ISNAD Pınar, Adem et al. “An Inventory Optimization Model for a Textile Manufacturing Company”. Journal of Turkish Operations Management 6/2 (December 2022), 1252-1262. https://doi.org/10.56554/jtom.1106406.
JAMA Pınar A, Utku DH, Kasımoğlu F. An Inventory Optimization Model for a Textile Manufacturing Company. JTOM. 2022;6:1252–1262.
MLA Pınar, Adem et al. “An Inventory Optimization Model for a Textile Manufacturing Company”. Journal of Turkish Operations Management, vol. 6, no. 2, 2022, pp. 1252-6, doi:10.56554/jtom.1106406.
Vancouver Pınar A, Utku DH, Kasımoğlu F. An Inventory Optimization Model for a Textile Manufacturing Company. JTOM. 2022;6(2):1252-6.

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