Hongbo Wang
School of Traffic and Logistics, Central South University of Forestry and Technology, 410004, Changsha, Hunan, China
Zhongwei Wang
School of Traffic and Logistics, Central South University of Forestry and Technology, 410004, Changsha, Hunan, China
ABSTRACT
With the expansion of competition and the growth of product variety, how to reduce safety stock in supply chain management has become a hot topic. Managers are seeking some areas that they can improve to make safety stock reduced meanwhile the cycle service level provided will not be influenced. Some pay more focus on the reduction of replenishment of lead time and the variability of lead time. Through analysing the normal approximation value of lead time demand distribution, the outcome shows that when cycle service level above 50%, these measures are effective. It also shows making the variability of lead time minimum has more effect on safety stock than reducing lead time. While the real situation is totally different, there is contradictory between the outcome from normal approximation value and formula derivation. By mathematic derivation, as the cycle service is above 50%, the reorder points will increase with the lead time variability decreasing. Therefore for enterprise with cycle service level above 50%, in order to reduce safety stock, the right choice should be to reduce the variability of lead time.
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How to cite this article
Hongbo Wang and Zhongwei Wang, 2013. Reasearch on the Real Linkage Effect Between Key Parameters in
Inventory Management. Journal of Applied Sciences, 13: 3752-3756.
DOI: 10.3923/jas.2013.3752.3756
URL: https://scialert.net/abstract/?doi=jas.2013.3752.3756
DOI: 10.3923/jas.2013.3752.3756
URL: https://scialert.net/abstract/?doi=jas.2013.3752.3756
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