A simulation study for a hybrid inventory control strategy with advance demand information

David Claudio, Jie Zhang and Ying Zhang

International Journal of Industrial and Systems Engineering, 2010, vol. 5, issue 1, 1-19

Abstract: Choosing the appropriate production and inventory control strategy is a key factor for the success of modern enterprises. Some industries adopt a Make-To-Order (MTO) policy to improve their punctuality and flexibility, while others adopt a Make-To-Stock (MTS) policy to minimise and control the inventory. This study proposes a hybrid strategy combining MTS and MTO with prioritisation. In the proposed strategy, the pull policy is considered for regular demands while a push policy with priority is applied to customers who notify their demand needs in advance. Through a set of simulation experiments this strategy is proved to be of great effectiveness.

Keywords: advance demand information; push-pull systems; MTO; make-to-order; MTS; make-to-stock; production economics; hybrid inventory control; production control; simulation; industrial engineering. (search for similar items in EconPapers)
Date: 2010
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