Inventory Model Design by Implementing New Parameters into the Deterministic Model Objective Function to Streamline Effectiveness Indicators of the Inventory Management

Mária Stopková, Ondrej Stopka and Vladimír Ľupták
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Mária Stopková: Department of Transport and Logistics, Faculty of Technology, Institute of Technology and Business in České Budějovice, 370 01 České Budějovice, Czech Republic
Ondrej Stopka: Department of Transport and Logistics, Faculty of Technology, Institute of Technology and Business in České Budějovice, 370 01 České Budějovice, Czech Republic
Vladimír Ľupták: Department of Transport and Logistics, Faculty of Technology, Institute of Technology and Business in České Budějovice, 370 01 České Budějovice, Czech Republic

Sustainability, 2019, vol. 11, issue 15, 1-15

Abstract: The aim of this article is to modify the parameters and thus the objective function of the deterministic model of inventory theory so that other important aspects, which influence inventory management, can be taken into consideration. These aspects include the nature of inventory consumption, the share of inventories in sales, the capacity of means of transport and, above all, the reliability of suppliers. This goal is achieved by performing sophisticated and specific calculations for the individual parameters in the modified model. The modification of the objective function of the deterministic model has created a new multi-criteria model. The outcome of this model sought to optimize the supply process in a way that minimizes the risks associated with a lack of inventories while maintaining the economic effectiveness thereof. The model effectiveness is examined by comparing the application of the deterministic model and the proposed model with modified objective function. The results of applying these individual models have been produced based on calculations of indicators showing inventory management effectiveness—the speed of inventory turnover and the average number of inventories in storage.

Keywords: inventory theory; inventory model; deterministic model; inventory management performance indicators (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:15:p:4175-:d:254143

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