Can I read Variance Amplification and the Golden Ratio in Production and Inventory Control on EtoBox?

Variance Amplification and the Golden Ratio in Production and Inventory Control by S.M. Disney; D.R. Towill; W. van de Velde is a Business, Management and Accounting article available to read on EtoBox.

What is Variance Amplification and the Golden Ratio in Production and Inventory Control about?

A discrete linear control theory model of a generic model of a replenishment rule is presented. The replenishment rule, which we term a ''Deziel Eilon-automatic pipeline, inventory and order-based production control system'', is guaranteed to be stable. From a z-transform model of the policy, an analytical expression for bullwhip is derived that is directly equivalent to the common statistical measure often used in simulation, statistical and empirical studies to quantify the bullwhip effect. This analytical expression clearly shows that we can reduce bullwhip by taking a fraction of the error between the target and actual inventory and pipeline (or work in progress (WIP) or ''orders placed but not yet received'') positions. This is in contrast to the common situation where ordering policies account for all of the error every time an order is placed. Furthermore, increasing the average age of the forecast reduces bullwhip, as does reducing the production/distribution lead-time. We then derive an analytical expression for inventory variance using the same procedure to identify the closed form bullwhip expression. We assume that a suitable objective function is linearly related to th

Who reads Variance Amplification and the Golden Ratio in Production and Inventory Control?

Author

S.M. Disney; D.R. Towill; W. van de Velde

Publisher

Elsevier Science; Elsevier ; Elsevier BV (ISSN 0925-5273)

Published

2004

Language

EN

Field

Business, Management and Accounting (Social Sciences)