The impact of nonconforming items on inventory systems

Takemoto Yasuhiko, Ikuo Arizono

Research output: Contribution to journalArticle

Abstract

The goal of inventory management is to decide the timing and quantity of ordering in response to various kinds of uncertainty. The failure of manufacturing machines, shortage of materials, and overworking may prevent manufacturers from achieving the planned quantity of items. Additionally, some nonconforming items may be included in the replenishment to retailers as a result of imperfect production and inspection by manufacturers and damage during transport. Consequently, the planned quantity of items may not be supplied to retailers. The uncertainty about production should be considered in the decision-making of inventory management. In this article, we consider the impact of nonconforming items on the following traditional inventory systems: continuous review and periodic review. In particular, we investigate how the inclusion of nonconforming items has an influence on inventory policies and operating costs. Then, the difference of influence between both systems is discussed.

Original languageEnglish
Pages (from-to)249-258
Number of pages10
JournalJournal of Japan Industrial Management Association
Volume60
Issue number5
Publication statusPublished - 2009
Externally publishedYes

Fingerprint

Inventory Systems
Inventory Management
Operating costs
Continuous Review
Periodic Review
Uncertainty
Inspection
Decision making
Shortage
Imperfect
Timing
Damage
Manufacturing
Inclusion
Decision Making
Costs
Inventory systems
Influence
Inventory management
Retailers

Keywords

  • Continuous review (r
  • Nonconforming items
  • Periodic review order-up-to S model
  • Q) model

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering
  • Applied Mathematics
  • Management Science and Operations Research
  • Strategy and Management

Cite this

The impact of nonconforming items on inventory systems. / Yasuhiko, Takemoto; Arizono, Ikuo.

In: Journal of Japan Industrial Management Association, Vol. 60, No. 5, 2009, p. 249-258.

Research output: Contribution to journalArticle

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