Accession Number : ADA557282
Title : A Spreadsheet Model That Estimates the Impact of Reduced Distribution Time on Inventory Investment Savings: What is a Day Taken Out of the Pipeline Worth in Inventory?
Descriptive Note : Master's thesis
Corporate Author : AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH GRADUATE SCHOOL OF ENGINEERING AND MANAGEMENT
Personal Author(s) : Saylam, Serhat
Report Date : Mar 2012
Pagination or Media Count : 105
Abstract : In most of the literature dealing with inventory problems, either with a deterministic or probabilistic model, lead time is viewed as a prescribed constant or a stochastic variable that is not subject to control. But in many practical situations, lead time can be reduced by an extra crashing cost; in other words, it is controllable. This study proposes a repeatable spreadsheet optimization model that estimates the impact of reduced replenishment lead time on inventory investment savings at forward and strategic locations to motivate decision makers to support enterprise-wide distribution process improvement. The study provides users with a means of automatically calculating inventory control parameters such as safety stocks and reorder points, and automatically estimating the savings caused by lead time mean or variability reduction. A trade-off analysis can be done to determine whether reducing lead time would override the lead time crashing cost. First, the model finds the optimal safety factor of an item based on a fill rate goal using Excel Solver. Then, Excel's VBA automates the process of finding safety factors for other items before and after lead time reduction. Finally, the model is applied to three different supply support activities to illustrate its superior features, which include allowing the user to change and upgrade it for future research.
Descriptors : *AUTOMATION , *INVENTORY CONTROL , *LEAD TIME , *OPTIMIZATION , *REDUCTION , *REPLENISHMENT , *SPREADSHEET SOFTWARE , COSTS , DISTRIBUTION , ESTIMATES , INVESTMENTS , SAVINGS , THESES , TRADE OFF ANALYSIS , USER NEEDS
Subject Categories : Economics and Cost Analysis
Computer Programming and Software
Logistics, Military Facilities and Supplies
Distribution Statement : APPROVED FOR PUBLIC RELEASE