Title: A two-stage method to determine parameters of (R, Q) inventory policy with storage capacity for a single item and multiple items

Authors: Kanokwan Singha; Jirachai Buddhakulsomsiri; Parthana Parthanadee

Addresses: Faculty of Logistics and Transportation Management, Panyapiwat Institute of Management, Nonthaburi, Thailand ' School of Manufacturing Systems and Mechanical Engineering, Sirindhorn International Institute of Technology, Thammasat University, Pathum Thani, Thailand ' Department of Agro-Industrial Technology, Faculty of Agro-Industry, Kasetsart University, Bangkok, Thailand

Abstract: This paper presents a method for determining parameters of (R, Q) policy for a single-item inventory system under limited storage space, and for multiple items sharing storage space, that minimise the total cost. A two-stage method is developed, consisting of bootstrap-iterative method to find an initial solution without considering storage capacity, and a hybrid between cyclic coordinate method and solution evaluation using simulation to find the final solution under limited storage space. Numerical examples to demonstrate the method and computational experiments to evaluate the method's effectiveness under various scenarios are provided. In the single item experiment, effects of lead time, storage capacity, item movement, demand variability, and unit over-storage cost on the total cost savings from the proposed method are investigated. In the multiple item experiments, effects of the method, storage space sharing, storage capacity, and item package sizes on the cost savings are examined.

Keywords: reorder point; order quantity; storage capacity; bootstrap-iterative; cyclic coordinate; over-storage.

DOI: 10.1504/IJLSM.2022.127087

International Journal of Logistics Systems and Management, 2022 Vol.43 No.3, pp.366 - 394

Received: 13 Nov 2019
Accepted: 05 Sep 2020
Published online: 22 Nov 2022 *

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