Continuous Multi-eEchelon Inventory Optimization
Name
scm2020-mathur-continuous-multi-echelon-inventory-optimization-capstone.pdf
Description
Supply Chain Management capstone research project
Size
1.97 MB
Format
Adobe PDF
Checksum (MD5)
4a13a36e8741e644b8d98603ff2717e2
Author(s)
Mathur, Sundeep
Date Issued
July 24, 2020
Abstract
Global supply chains are becoming increasingly complex systems that drive significant investments in
inventory throughout the network. Our sponsor for this project uses a multi-echelon inventory
optimization (MEIO) model to manage safety stock inventory across its network. The MEIO model helps
them optimize inventory based on upstream and downstream supply chain performance but it does not
guarantee year over year reductions in inventory levels that the company desires. To address this issue,
we studied how the company can better utilize MEIO to systematically reduce its inventories over time
and created a methodology that can be employed by other companies also. We applied the methodology
on two products that are presented as case studies. For the chosen products, we found that variation in
supply lead time is the primary reason for high MEIO safety stock values. We further identified the
underlying cause of variation and provided recommendations to reduce variation in lead time in each case
study. This research creates a framework that companies can use to systematically minimize MEIO safety
stocks and presents case studies that apply this framework to minimize variation in supply lead time on
two products and their corresponding MEIO safety stocks.
Subjects
Supply Chain Strategy
Inventory Management
Persistent DSpace Link
