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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 Qm 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.

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TI Journals

ISSN

2306-6474

www.tijournals.com

Regarding Minimum Order Quantity with Simulation

Zahra Hashemi Dehaghi *1, Seyed Mojtaba Sajadi 2, Majid Nili Ahmadabadi 3

1

Graduate Student industrial management, Islamic Azad University of Najaf Abad, Iran.

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

3

Assistant faculty of management, Islamic Azad University of Najaf Abad, Iran.

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.

Email address: hashemi198401@yahoo.com

400

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

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 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.

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

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 Purchasing 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

Total Purchasing Cost: 229,200

Value

21

22

21

23

22

21

20

20

20

20

0

0

20

21

20

21

22

20

20

20

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

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

403

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.

References

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

Al-Zubaidi,Hassan. And Tyler,David. 2004, "A simulation model of quick response replenishment of seasonal clothing", International Journal of Retail

& Distribution Management. Vol.32,Iss:6. pp:320-327.

Anderson,Edward J. Cheah,Boon Soon. 1993, "Capacitated lot-sizing with minimum batch sizes and setup times" ,International Journal of Production

Economics.30-31,137-152.

Brander,Par. Leven,Erik. and Segerstedt,Anders. 2005, "Lot sizing in a capacity constrained facility-a simulation study of stationary stochastic

demand" ,Int.J.Production Economics.93-94,375-386.

Donselaar,Karel H.Van. Broekmeulen,Rob A.C.M. 2011, "Determination of safety stocks in a lost sales inventory system with periodic review, positive

lead-time, lot-sizing and a target fill rate" , Int.J.Production Economics. 1-9.

Kampf,M. Kochel,P. 2006, "Simulation-based sequencing and lot size optimizations for a production-and-inventory system with multiple items" ,

Int.J.Production Economics. 104,191-200.

Konstantaras,I. Skouri,K. and Jaber,M.Y. 2012, "Inventory models for imperfect quality items with shortages and learning in inspection" ,Applied

Mathematical Modelling .

Kostic,Konstantin. 2009, "Inventory control as a discrete system control for the fixed-order quantity system" ,Applied Mathematical

Modelling.33,4201-4214.

Musalem,Eric Porras. Dekker,Rommert.2005,"Controlling inventories in a supply chain: A case study",Int.J.Production Economics.93-94,179-188.

Mourani,Iyad. Hennequin,Sophie. and Xie,Xiaolan. 2008, "Simulation-based optimization of a single-stage failure-prone manufacturing system with

transportation delay" ,Int.J.Production Economics.112,26-36.

Okhrin,Irena. Richter,Knut. 2011, "The linear dynamic lot size problem with minimum order quantity" ,Int.J.Production Economics.133,688-693.

Porras,Eric.Dekker,Rommert.2006,"An efficient optimal solution method for the joint replenishment problem with minimum order quantities",

European Journal of Operational Research.174,1595-1615.

Sana,Shib Sankar. 2011, "The stochastic EOQ model with random sales price" ,Applied Mathematics And Computation.218,239-248.

San-Jose,L.A.Sicilia,J. and Garcia-Laguna,J.2007,"An economic lot-size model with partial backlogging hinging on waiting time and shortage

period",Applied Mathematical Modelling.31,2149-2159.

San-Jose,Luis A.Garcia-Laguna,Juan.2009,"Optimal policy for an inventory system with backlogging and all-units discounts: Application to the

composite lot size model",European Journal of Operational Research.192,808-823.

Senygit,Ercan. Dugenci,Muharrem. Aydin,Mehmet E. and Zeydan,Mithat. 2012, "Heuristic-based neural networks for stochastic dynamic lot sizing

problem" ,Applied Soft Computing. 1503-1511.

Snyder,Ralph D. 1974, "A note on fixed and minimum order quantity stock systems" ,Operations Research Quarterly. 25,635-639.

Wagner,Michael R. 2011, "Online lot-sizing problems with ordering, holding and shortage costs" ,Operations Research Letters.39,144-149.

Wang,Lin. Fu,Qing-Liang. and Zeng,Yu-Rong. 2012, "Continuous review inventory models with a mixture of back orders and lost sales under fuzzy

demand and different decision situations" ,Expert Systems with Applications.39,4181-4189.

Widyadana,Gede Agus. Ming wee,Hui. 2011, "Optimal deteriorating items production inventory models with random machine breakdown and

stochastic repair time" ,Applied Mathematical Modelling.35,3495-3508.

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