Data mining Aided Proficient approach for optimalinventory control in supply chain management
Assistant Professor, Department of Mechanical Engineering,Proudadevaraya Institute of Technology, Hospet.Visvesvaraya Technological University, Karnataka, Indiathotappa@gmail.com
Dr. Karnam Ravindranath
PrincipalAnnamacharya Institute of Technology, Tirupatikravi1949@yahoo.com
Optimal inventory control is one of the significanttasks in supply chain management. The optimal inventorycontrol methodologies intend to reduce the supply chain (SC) costby controlling the inventory in an effective manner, such that, theSC members will not be affected by surplus as well as shortage of inventory. In this paper, we propose an efficient approach thateffectively utilizes the data mining concepts as well as geneticalgorithm for optimal inventory control. The proposed approachconsists of two major functions, mining association rules forinventory and selecting SC cost-impact rules. Firstly, theassociation rules are mined from EMA-based inventory data,which is determined from the original historical data. Apriori, aclassic data mining algorithm is utilized for mining associationrules from EMA-based inventory data. Secondly, with the aid of genetic algorithm, SC cost-impact rules are selected for every SCmember. The obtained SC cost-impact rules will possibly signifythe future state of inventory in any SC member. Moreover, thelevel of holding or reducing the inventory can be determinedfrom the SC cost-impact rules. Thus, the SC cost-impact rulesthat are derived using the proposed approach greatly facilitateoptimal inventory control and hence make the supply chainmanagement more effective.
Keywords-SC cost; SC cost-impact rule; EMA-based inventory; Apriori; Genetic Algorithm (GA).
Nowadays, supply chains are at the center stage of business performance of manufacturing and service enterprises. A SC consists of all parties involved directly or indirectlyand in satisfying a customer request. It includes suppliers,manufacturers, distributors, warehouses, retailers and evencustomers themselves . Because of the intrinsic complexityof decision making in supply chains, there is a growing needfor modeling methodologies, which help to identify andinnovate strategies for designing high performance SCnetworks . Research on supply chains makes an attractivefield of study, offering several approach roads toorganizational integration processes. Some of the problems areconsidered as most important, which canalize research projectin the area of supply chains that are related to demandvariability and demand distortion throughout the SC .Modern supply chains are highly complex and dynamic; thenumber of facilities, the number of echelons, and the structureof material and information flow contribute to the complexityof the SC . In addition, increases in the uncertainties insupply and demand, globalization, reduction in product andtechnology life cycles, and the use of outsourcing inmanufacturing, distribution and logistics resulting in morecomplex supply networks, can lead to higher exposure to risksin the SC .The ultimate goal of every SC is to maximize the overallvalue generated by the chain, which depends on the ability of the organization to fulfill customer orders faster and moreefficiently . While the separation of SC activities amongdifferent companies enables specialization and economies of scale, many important issues and problems need to be resolvedfor a successful SC operation which is the main purpose of supply chain management (SCM) . SCM is a traditionalmanagement tool  which has attracted increasing attentionin the academic community and in companies looking forpractical ways to improve their competitive position in theglobal market . SCM is an integrated approach to plan andcontrol materials and information flows . Successful SCMincorporates extensive coordination among multiple functionsand independent companies working together to deliver aproduct or service to end consumers . Inventory control hasbeen considered as a vital problem in the SCM for severaldecades .Inventory is defined as the collection of items stored by anenterprise for future use and a set of procedures calledinventory systems assist in examination and control of theinventory. The inventory system supports the estimation of amount of each item to be stored, when the low items shouldbe restocked and the number of items that must be ordered ormanufactured as soon as restocking becomes essential. The SCcost was hugely influenced by the overload or shortage of inventories . Since inventory is one of the major factorsthat affect the performance of SC system, the effectivereduction of inventory can substantially reduce the cost levelof the total SC . Thus, inventory optimization hasemerged as one of the most recent topics as far as SCM isconsidered . Inventory optimization application organizesthe latest techniques and technologies, thereby assisting theenhancement of inventory control and its management acrossan extended supply network. Some of the design objectives of inventory optimization are to optimize inventory strategies,and thus used in enhancing customer service, reducing leadtimes and costs and meeting market demand .
(IJCSIS) International Journal of Computer Science and Information Security,Vol. 8, No. 2, May 201043http://sites.google.com/site/ijcsis/ISSN 1947-5500