<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Nowadays, some manufacturing organizations may well face production restrictions. For example, in case the number of products goes up, the company might not be capable of producing all products. As a consequence, the company may face backlogging. In the meanwhile, in case the demand for products rises, the given company may experience a restricted capacity to react to that kind of demand properly; thus, it will suffer backlogging. Over the course of this study, that kind of company facing the mentioned circumstances is considered. To meet those exceeded demands, companies would be forced to purchase some products from outside. Thus, the study’s primary aim is to define and calculate the optimum make and buy a number of products so that overall inventory cost is reduced and optimized. To do so, a model is proposed referred to as the make-with-buy model. This model is designed and solved by exact solution software in the based branch and bound method. The results of the study confirm the feasibility and efficiency of this method and demonstrate that this model can be applied to lessen the overall inventory costs, including maintenance, order, setup, and purchasing costs, and also the total costs of products.</p>
</abstract>

Nowadays, some manufacturing organizations may well face production restrictions. For example, in case the number of products goes up, the company might not be capable of producing all products. As a consequence, the company may face backlogging. In the meanwhile, in case the demand for products rises, the given company may experience a restricted capacity to react to that kind of demand properly; thus, it will suffer backlogging. Over the course of this study, that kind of company facing the mentioned circumstances is considered. To meet those exceeded demands, companies would be forced to purchase some products from outside. Thus, the study’s primary aim is to define and calculate the optimum make and buy a number of products so that overall inventory cost is reduced and optimized. To do so, a model is proposed referred to as the make-with-buy model. This model is designed and solved by exact solution software in the based branch and bound method. The results of the study confirm the feasibility and efficiency of this method and demonstrate that this model can be applied to lessen the overall inventory costs, including maintenance, order, setup, and purchasing costs, and also the total costs of products.

Introduce a New Mathematical Approach to Inventory Management in Production Processes Under Constrained Conditions

Department of Doctoral Program, Faculty Economic and Business

Foundations of Computing and Decision Sciences

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Nowadays, some manufacturing organizations may well face production restrictions. For example, in case the number of products goes up, the company might not be...

Introduce a New Mathematical Approach to Inventory Management in Production Processes Under Constrained Conditions

Publié en ligne: 13 déc. 2022

Pages: 421 - 431

Reçu: 10 août 2022

Accepté: 21 nov. 2022

DOI: https://doi.org/10.2478/fcds-2022-0023

Mots clés
production capacity, make-with-buy, Inventory cost, production restrictions

© 2022 Dani Darmawan et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Introduce a New Mathematical Approach to Inventory Management in Production Processes Under Constrained Conditions

Publié en ligne: 13 déc. 2022

Pages: 421 - 431

Reçu: 10 août 2022

Accepté: 21 nov. 2022

DOI: https://doi.org/10.2478/fcds-2022-0023

Mots clésproduction capacity, make-with-buy, Inventory cost, production restrictions

© 2022 Dani Darmawan et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Mots clés
production capacity, make-with-buy, Inventory cost, production restrictions