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Inventory Management and Inbound Logistics Optimization for a Food Processing Company

Zhou, Heng
http://rave.ohiolink.edu/etdc/view?acc_num=ucin1384426173

Abstract Details

2013, MS, University of Cincinnati, Engineering and Applied Science: Mechanical Engineering.
Inbound logistics can be described as a process where large sets of raw materials from numerous vendors are transported to their designated factories to fulfill the production needs. Traditionally, more emphasis has been put on outbound logistics management. Inbound logistics share the same important role as the outbound one since it'll determine the raw material purchasing price from each vendor for the company. This work focuses on the inventory management and network distribution design part by measuring the new inventory holding policy and transportation strategy adopted for a food processing company in the Midwest. The current inventory management situation of the company is that too much safety inventory amount has been carried. Regarding to the inbound logistics, the raw material vendors seldom do the freight consolidation, as a result more trucks have to be dispatched to fulfill the production needs of the factories. First a normal distribution inventory consumption model will be introduced to calculate the optimal safety inventory amount in the inventory management part. Next in the transportation network design part, Gurobi linear optimization tool will be used to determine the best consolidation location for each particular material. A "Grouping method" based on different constraints will be adopted to transport goods from consolidation points to their designated factories. After the implementation of the new inventory management strategies, the new safety inventory amount has been dramatically cut down which will lead to a much lower inventory holding cost for the company. Also through the consolidation and grouping processes for the raw material, we are able to fully utilize the capacity of each truck and dramatically decrease the truck dispatching times to further lower the inbound transportation cost for the company. In this study, we are facing up to several new constraint like the goods with different temperature cannot be transported together which has seldom been done before. Also to treat either of the factories as a consolidation point is a feasible method to avoid extra transshipment point building cost. This study deals the inventory management and transportation design part separately. In the future study, we may try to integrate them into a single problem to further discover their interaction.
Hongdao Huang, Ph.D. (Committee Chair)
Janak Dave, Ph.D. (Committee Member)
David Thompson, Ph.D. (Committee Member)
67 p.
Industrial Engineering
Inbound Logistics; Safety Inventory; Consolidation Points; Transportation Network

Recommended Citations

Citations

  • Zhou, H. (2013). Inventory Management and Inbound Logistics Optimization for a Food Processing Company [Master's thesis, University of Cincinnati]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=ucin1384426173

    APA Style (7th edition)

  • Zhou, Heng. Inventory Management and Inbound Logistics Optimization for a Food Processing Company. 2013. University of Cincinnati, Master's thesis. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=ucin1384426173.

    MLA Style (8th edition)

  • Zhou, Heng. "Inventory Management and Inbound Logistics Optimization for a Food Processing Company." Master's thesis, University of Cincinnati, 2013. http://rave.ohiolink.edu/etdc/view?acc_num=ucin1384426173

    Chicago Manual of Style (17th edition)

ucin1384426173
1,738
© 2013, all rights reserved.
This open access ETD is published by University of Cincinnati and OhioLINK.