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# International Journal of Engineering Sciences, 2(8) August 2013, Pages: 399-403

TI Journals
ISSN
2306-6474

## International Journal of Engineering Sciences

www.tijournals.com

## Determine the Optimal Order Quantities in Lot Sizing Models

Regarding Minimum Order Quantity with Simulation
1

Assistant faculty of industrial engineering, Islamic Azad University of Najaf Abad, Iran.
3
2

AR TIC LE INF O

AB S TR AC T

Keywords:

In this study, lot sizing models of offer so that the cost shortage, holding inventory of exposure,
ordering are to be considered and try to determine the values of Q m or maximum inventory so that the
total cost could be as little as possible. Lot sizing systems with the specified consumption in a general
model are studied and optimization of component variables into a comprehensive model is presented.
The process of ordering for a single product and for a single machine is considered. Faced with a
shortage is allowed by back log .This study try to follow the optimal policy that specified at the
beginning of which period and how much to stock, so that minimize the total costs, which consists of the
ordering costs, holding costs and shortage cost. To achieve optimal responses to the decision variables
and objective function of the lot size system simulation software is used Arena. Finally, numerical
examples and its sensitivity analysis of key parameters are given to illustrate the proposed model.

Lot sizing
Minimum order quantity
Shortage
Simulation

1.

Introduction

In this study, we developed a model of inventory in which they are consumption for a given future period but these values are
not necessarily equal. How many orders at the beginning of the costs incurred to the system, the proper design of decision
rules, based on a mathematical model can lead to significant benefits. As far as we know, only a few papers investigate
problems where a minimum order quantity restriction is incorporated into the model. As first time restriction by using MOQ
snyder [16] has been studied. He pointed out in his article, the lot size is small, using MOQ significant savings are possible.
Anderson and Cheah [2] developed a pseudo-polynomial forward dynamic programming procedure that, for every period,
needs a space of states that are defined by the end-period inventory levels. Musalem and Dekker [8] The objective therefore is
to minimize only the total inventory costs with respect to the lot size restrictions, and not the sum of setup costs and inventory
costs, as in mainstream models. Porras and Dekker [11] study the joint replenishment problem for M items with MOQ
constrains for each item while Okhrin and Richter [10] The single-product, periodic order model by taking minimum order
quantity (MOQ) were studied.
Among the problems in the existing system to a system imposes high costs, shortage with backlog demand. Many
investigations have been made in the case of San-Jose et al. [13] study a continuous review inventory control system over a
infinite-horizon with deterministic demand where shortage is partially backlogged. San-Jose and Garcia-Laguna [14]
examines an inventory model with full backlogging and all-units quantity discounts. Widyadana and Ming Wee [19]
Production inventory model with defective items considering random machine failure and repair time have developed. In the
model, the shortage has been studied of a last sale and backlog. Donselaar and Broekmeulen [4] Determination of inventory
control system with lost sales examined. Wagner [17] study inventory management problems where demands are revealed
incrementally and procurement decisions must be made before the demands are realized. They consider two cost
minimization problems: (1) perishable products with lost sales and (2) durable products with backlogged demand. Sana [12]
Based on the partial backlogging and lost sale cases during stock out period, develops the criterion for the optimal solution
for the replenishment size such that the integrated expected profit is maximized.
Konstantaras et al. [6] investigates an EOQ model with imperfect quality items and shortages, where the fraction of imperfect
quality in each shipment reduces because of learning. Numerical results showed that as learning in quality becomes faster, the
number of defective units, the total shipment size and the backordering level reduce, while the total profit increases.
Modeling and simulation of discrete event systems which include the state variable only in a set of discrete levels can change
over time Simulation is generally used to study non-deterministic problems in industry. When a simulation process finds the
* Corresponding author.

400

## Zahra Hashemi Dehaghi et al.

Int ernational Journal of Engi neering Sc iences, 2(8) Au gust 2013

solution to an NP-hard problem, its efficiency is lowered, and computational costs increase.[18] Al-Zubaidi and Tyler [1]
Arena software used for your article. Brander et al. [3] examine if a deterministic model can be used if demand is stationary
stochastic. Simulation model was used to solve them. Kostic [7] shows how to model a problem to find optimal number of
replenishments in the fixed-order quantity system as a basic problem of optimal control of the discrete system and To find the
optimal process, the simulation-based optimization is used. Senyigit et al. [15] reports an investigation for solving the
problem of multiple period single-item SDLS with uncertain and variable demand and price, where holding cost assumed
independent of purchasing cost. After a TDOE-based ANOVA, RLUC is found the best of three operating methods with
simulation.
Kampf and Kochel [5] investigate the following decision problem. They To find optimal parameter values we use simulation
optimization, where a simulator for the system is combined with a genetic algorithm as an optimizer. Mourani et al. [9]
addresses the optimization of the continuous-flow model of a single-stage single-product manufacturing system with constant
demand and transportation delay from the machine to the inventory. A bi-section search algorithm based on simulation and
sample gradients is proposed to determine the optimal hedging point.
So In order to achieve the optimal policy is to determine which of the beginning of the storage period and how much reach
that minimize the total costs, which consists of the ordering costs, holding costs and shortage cost.

2.

Assumptions

## In order to model the following assumptions are considered:

1. The use of predicting the future is clear for N periods;
2. Orders are only beginning to stock and are available immediately;
3. Amounts at any time, always at the same time wholesale warehouse is out.
4. Amount of time as a fixed fee per order, ordering the agency awarded.
5. Holding costs (warehousing) in the aggregate amount of inventory per period during which the stock will be
awarded to the organization;
6. Faced with a shortage of orders is allowed a backlog.
7. During the time horizon is limited;
8. Inventory at the beginning and end of the planning horizon is equal to zero;
9. Ordering policy based on minimum order quantity is the quantity demanded;
10. Production rate is constant.

3.

## Computer simulation modeling

Computer simulation is now well established as a powerful problem-solving tool. In the past, discrete event simulation was
developed as a standard method for analysis complex manufacturing systems. It has been used to study wide ranging topics
such as urban systems, economic systems, business systems, production systems, social systems, transportation systems,
health care systems and many more. Another major factor is the flexibility of simulation modelling when compared, for
example, to the structural restrictions imposed by mathematical programming formulation of a problem. Even when an
analytical model can be applied to a problem, simulation is frequently used to study the practical implications of the
assumptions underlying the analytical model. The objective of this study is Determine the optimal order quantities with
computer-simulation models, using the ARENA simulation package, to simulate in lot sizing models with regard to minimum
order quantity.

4.

## Description of the simulation model

In this paper, a simulation model with a numerical example with random data (Because it is a hypothetical example of
random data random data that is used to select the software is not used.) Be examined and then use this model to be emulated
by software Arena model. Thus, the problem instance, with quantities of 40 different demand are considered. First, it is
necessary to model assumptions, simulation language and implemented them into our model. This module is used in the
simulation model. We use modules: create, process, decide, dispose, assign,... of basic process panel. The model includes two
types of decision variables and the dependent variable are variable. Decision variable order batch size, at the beginning of
simulation model once before the simulation is initialized and then randomly change the previous answer. The issue of
dependent variables such as the total cost of ordering and production, inventory holding cost and shortage cost and inventory
... Values during the simulation run are determined by the amount . The system parameters are kept constant in the
different scenarios. These parameters include ordering cost, purchasing cost, holding cost and shortage cost of product
demand are the data rate and Expression software module are defined. Figure ,1. and 2. shows the simulation model and its
solution algorithm.

Determine the Optimal Order Quantities in Lot Sizing Models Regarding Minimum Order Quantity with Simulation

401

## 4.1. The parameters of the hypothetical data

The data presented in Table 1 and 2, the best values obtained are presented in Table 3 Arena software.
Table 1. Parameter values for the demand

Period

10

11

12

13

14

15

Demand

25

12

25

20

15

20

15

15

10

12

10

15

20

Period
Demand

16
25

17
10

18
0

19
25

20
20

21
15

22
15

23
12

24
12

25
0

26
10

27
15

28
15

29
10

30
0

Period
Demand

31
12

32
10

33
15

34
15

35
20

36
25

37
0

38
10

39
25

40
20

402

## Unit Ordering Cost

Unit Holding Cost
Unit Shortage Cost
Minimum Order Quantity

5.

500
300
50
70
20

Simulation results

According to what was stated in the previous section, The problem with the numerical data, then run the simulation 1000
times, and ordering quantities as the appropriate value of the objective function was optimized. The change in the objective
function value Table 3. has been proposed.
Table 3. the change in objective function value

Repeated
simulations
Value z*

100

150

160

170

173

1000

602,000

602,000

572,980

548,610

463,350

444,980

444,980

The results show that after 1000 iterations, the objective function decreased from 602,000 to 444,980, and the optimal
objective function value of 173 is obtained, which is repeated. Full details of the results of the optimal ordering quantity and
cost values in Table 4. has been proposed.
Table 4. values for optimization

Replication 173

Output
OPTX1
OPTX2
OPTX3
OPTX4
OPTX5
OPTX6
OPTX7
OPTX8
OPTX9
OPTX10
OPTX11
OPTX12
OPTX13
OPTX14
OPTX15
OPTX16
OPTX17
OPTX18
OPTX19
OPTX20

Value
21
22
21
23
22
21
20
20
20
20
0
0
20
21
20
21
22
20
20
20

## Total Ordering Cost: 18,500

Total Shortage Cost: 280

Output
OPTX21
OPTX22
OPTX23
OPTX24
OPTX25
OPTX26
OPTX27
OPTX28
OPTX29
OPTX30
OPTX31
OPTX32
OPTX33
OPTX34
OPTX35
OPTX36
OPTX37
OPTX38
OPTX39
OPTX40

Value
20
0
21
20
20
21
22
20
20
20
20
20
20
21
21
20
21
22
20
21

## Total Holding Cost: 197,000

Determine the Optimal Order Quantities in Lot Sizing Models Regarding Minimum Order Quantity with Simulation

403

## Internat ional Jour nal of Engineeri ng Science s, 2(8) Au gust 2013

6.

Conclusions

The aim of this study was to determine the optimal order quantities in lot sizing models with regard to minimum order
quantity and shortage in a backlog way using simulation by Arena software. This study try to follow the optimal policy that
specified at the beginning of which period and how much to stock, so that the sum up of the total cost of ordering and
planning to minimize. The parameters defining the problem and its model based on the numerical examples considered in the
simulation environment Arena, the results show good performance and good performance is simulated. Numerical examples
carried out showed that the simulation model is able to address the research objectives. In fact, the flexibility of the
simulation model, is one of the most important advantages; because in all parts of the model can be changed and the demands
of the system behavior.

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