Research Reports from the Department of Operations
Document Type
Report
Publication Date
2-1-1971
Abstract
This article describes an inventory control study conducted for a large manufacturing company involving the distribution of over 7,000 line items through six major warehouses and nearly 800 authorized distributors across the U.S. The study's success, rare in systems of this scale, addressed challenges including unfamiliarity with research methods, inadequate evaluation of parameters, and lack of practical recommendations. A task force comprising operations research faculty, graduate students, and company managers collaborated to optimize inventory control while maintaining a predetermined service level. The study focused on evaluating holding, setup, and shortage costs, with a particular emphasis on shortage costs. Extensive computer simulations demonstrated the effectiveness of the recommended policies, leading to their immediate implementation by company management. The study not only minimized total inventory costs but also familiarized company personnel with operations research techniques, encouraging future applications in other areas.
Keywords
Operations research, Inventory control--Mathematical models, Warehouses--Management, Physical distribution of goods, Decision making--Mathematical models, Cost control, Simulation methods
Publication Title
Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University
Issue
Technical memorandum no. 216
Rights
This work is in the public domain and may be freely downloaded for personal or academic use
Recommended Citation
Salvador, Michael S.; Oral, Muhittin; Reisman, Arnold; and Dean, Burton V., "Mathematical Modeling Optimization and Simulation Improve Large-Scale Finished Goods Inventory Management" (1971). Research Reports from the Department of Operations. 285.
https://commons.case.edu/wsom-ops-reports/285