THE OPTIMUM EXTENT OF ICP INVENTORY CONTROL.
Abstract
The report concerns a supply system consisting of retail stock points supplying customers, wholesale stock points supplying the retail stockpoints, and an inventory control point (ICP) which maintains perpetual inventory records of wholesale stocks only. The problem is to determine if a particular retail stockpoint should report to the ICP its issues, receipts, and balance on hand of a particular inventory item, and, if so, how frequently to report them. The recommended mathematical solution is one which maximizes the excess of benefits (primarily a reduction of wholesale level safety stocks) over costs of data processing and transmission, considering the system as a whole. The solution indicates that an item might be reported daily by some retail stockpoints, less frequently by others, and not at all in some cases. The decision would be made at the ICP, but by a screening method at the retail stockpoints many items would be eliminated from consideration at the ICP. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 01, 1967
- Accession Number
- AD0668019
Entities
Organizations
- LMI