Inventory Lot SizingIntroductionBackground informationResearches on inventory lot sizing remain multifaceted and scope of findings on the topic has captured different aspects including single item economic lot-sizing problem with regard to bounded inventory as well as lost-sales. Previous studies that attempted to contextualize inventory lot sizing within supply chain management included Nia, Far and Niaki (2014) who called for the need to bring together different facets of distribution facilities and options that can help productivities to obtain materials and undertake processing into the final product. Contrariwise, background information on inventory lot sizing stretches beyond what Nia, Far and Niaki (2014) proposed.
Previous studies from Jaber and Bonney (1996) noted that from history, the concept has emanated from the globalized economy as well as liberation of market place. Studies such as Gutiérrez et al. (2003) recognized that lean productions were interested in development of coordination of different processes including item production material outsourcing and returning processes. As a result, inventory lot sizing was viewed to have sprung due to globalized economy as well as liberation of market thus enabling productions to incorporate different production uncertainties as well as financial risk into firms’ inventory control decisions and different levels of production.
On the other hand, background information from scholars who have looked at inventory lot sizing from the perspective of lean production argue that the concept was motivated by the challenges of scheduling the shutting down of nuclear reactors when systems undergo maintenance (Chen and Thizy, 1990; Federgruen and Tzur, 1991). While there is paucity of research data to support this position, it forms background information in understanding elements such as mathematical algorithms solutions which are important factors in inventory management.
Conversely, researches that have evaluated inventory lot sizing for the last three to four decades have been motivated primarily with the need to establish a model that saves cost for enterprises who for long, were seen to be struggling to maintain relevant inventory levels so as to boost their images through customer satisfaction and to cope with stochastic customer demands (Atamtürk and Küçükyavuz, 2005; Balakrishnan et al. , 2004). Still, there is need to establish the stretch of inventory lot sizing by integrating supply chain as a network of companies or firms producing, selling and delivering services or products to a predetermined market segment.
As a result, this report provides succinct understanding of supply chain, providing the location of inventory as part of what forms the basis of supply chain. Inventory Management Inventory management is the precursor of inventory lot sizing and further provides an understanding of figures that show place of location of inventory. From research based evidences, inventory management is the concept in supply chain management that permeates processes of decision-making in different firms (Van Den Heuvel and Wagelmans, 2008).
It is for this matter that management of relationships between sellers and buyers remain central in supply chain. As matter of fact, studies that have focused on the need to keep this relationship concluded that it is the core practice in supply chain management (Bowersox, 2002). Despite this position, the argument presented by Bowersox (2002) fails to inculcate the aspect of place location of the inventory as one factor that involves a set of decisions aimed at matching firms’ demands with the supply of products as well as materials over space and time.
Currently, inventory management is focusing more attention to ways of attaining a given service level objectives, operations, observing product and demand characteristics. These new developments call for establishment of role of inventory in supply chain management. In such connectedness, figure 1 below provides an understanding of the relationship between different variables of inventory management including the place of the inventory.