Title: A simulation study for a hybrid inventory control strategy with advance demand information

Authors: David Claudio, Jie Zhang, Ying Zhang

Addresses: Department of Industrial and Manufacturing Engineering, The Pennsylvania State University, 310 Leonhard Building, University Park, PA 16802, USA. ' Department of Industrial and Manufacturing Engineering, The Pennsylvania State University, 310 Leonhard Building, University Park, PA 16802, USA. ' Department of Industrial and Manufacturing Engineering, The Pennsylvania State University, 310 Leonhard Building, University Park, PA 16802, USA

Abstract: Choosing the appropriate production and inventory control strategy is a key factor for the success of modern enterprises. Some industries adopt a Make-To-Order (MTO) policy to improve their punctuality and flexibility, while others adopt a Make-To-Stock (MTS) policy to minimise and control the inventory. This study proposes a hybrid strategy combining MTS and MTO with prioritisation. In the proposed strategy, the pull policy is considered for regular demands while a push policy with priority is applied to customers who notify their demand needs in advance. Through a set of simulation experiments this strategy is proved to be of great effectiveness.

Keywords: advance demand information; push-pull systems; MTO; make-to-order; MTS; make-to-stock; production economics; hybrid inventory control; production control; simulation; industrial engineering.

DOI: 10.1504/IJISE.2010.029754

International Journal of Industrial and Systems Engineering, 2010 Vol.5 No.1, pp.1 - 19

Published online: 02 Dec 2009 *

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