A Study on Periodical Ordering System to Control the Variances of Ordering Quantity and Inventory

Abstract

The objective of this study is to design a periodic ordering system for multi-stage push-type production and inventory systems, which provides the possible procedure to control both the variances of order quantity and inventory. This system realizes the stable production and low level inventory. The conventional solution is the transfer function method, which is the description method of dynamic system with a single variable. However, this is difficult to be solved in the case which the system is a multi-stage process and the demand is not stationary. In this paper, we propose the new formulation to control production and inventory based on the optimal regulator control theory techniques, that has superior extensity. From the simulation experiment, we show that the system regulates both variances.