A Simulation-Based Model for Determining Safety Inventory at a Fixed-time Period System
Le Tran Trung Kien1, Azanizawati Ma’aram2, Syed Ahmad Helmi Syed Hassan3, Nor Hasrul Akhmal Ngadiman4, Aini Zuhra Abdul Kadir5
1Le Tran Trung Kien is a Senior Production Engineer, Bosch Vietnam Co Ltd.
2Azanizawati Ma’aram, Senior Lecturer, Faculty of Engineering, School of Mechanical Engineering, Universiti Teknologi Malaysia (UTM).
3Syed Ahmad Helmi, Faculty Member, Faculty of Engineering, Universiti Teknologi Malaysia.
4Aini Zuhra Abdul Kadir, Senior Lecturer, Faculty of Engineering, School of Mechanical Engineering, Universiti Teknologi Malaysia (UTM).
5Nor Hasrul Akhmal Ngadiman, Senior Lecturer, Faculty of Engineering, School of Mechanical Engineering, Universiti Teknologi Malaysia (UTM)
Manuscript received on September 16, 2019. | Revised Manuscript received on 24 September, 2019. | Manuscript published on October 10, 2019. | PP: 2775-2780 | Volume-8 Issue-12, October 2019. | Retrieval Number: A3912119119/2019©BEIESP | DOI: 10.35940/ijitee.A3912.119119
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: This paper develops a simulation model for determining safety inventory associated with a certain value of cycle service level in a fixed-time period system. The model takes into account actual amount of materials received from suppliers, and deviation from probability distribution of daily forecast demand. Constraints on order size are also embodied into the model. This model was constructed by using Visual Basic Application added in Microsoft Excel. After developing the model, hypotheses testing is employed to verify the model. This model allows identifying safety inventory under uncertain conditions which prohibits from the use of ordinary mathematical formula. The model was locally verified. Stochastic variables including customer demand and supplier’s lead time are assumed to be normally distributed. Independent demand items are considered and backorders are not allowed. Under specific conditions, such as distributions of demand and lead time are normally distributed, and fixed-time period system is being used. This model allows materials planner promptly identifies safety inventory associated with a certain level of cycle service level. Furthermore, planner can perceive the affects of changing input parameters on the amount of safety inventory required. There were very few researches focus on variations of demand and lead time at the same time. In reality, this case usually happens, thus the firms have been facing highly variations form both supplier and customers. Therefore, this paper intends to close this gap by simulating these factors and taken into account for determining safety inventory.
Keywords: Independent Demand, Safety Inventory, Simulation, Fixed-time Period System,
Scope of the Article: Modelling and Simulation