SAFETY STOCK PLANNING AND SUPPLY CHAIN OPTIMIZATION IN STOCK STATUS

University essay from Uppsala universitet/Statistiska institutionen

Abstract: This paper proposes a safety stock calculation function based on their distribution properties and create a guideline for the stock status optimization problem. The motivation for this paper originates the cooperation with a drilling tools company, Epiroc Drilling tools AB. The safety stock calculation divides all items into three distribution and design the safety stock for each types separately considering the influence of service level value and lead time. During the process of guideline design, complicated production chain framework is taken into account through recursive algorithm. The stock status combination which can give the minimum storage cost is the optimal guideline for stock item and non-stock item. The time for approximating the global minimum through exhaustive search is remarkably reduced due to the application of Parallel programming and statistical model.

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