BUSINESS LOGISTICS SYSTEMS ANALYSIS

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BUSINESS LOGISTICS SYSTEMS ANALYSIS
Lecture 27PIPELINE FILLING
H. E. METZNER, Ph.D. Department of Engineering
Management University of Missouri-Rolla

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Pipeline Inventories are in-transit stocks that
reside in transportation equipment moving between
inventory holding points.
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MANAGEMENT OBJECTIVES

• Control time in transit
• Reduce transit-time variability
• Lower safety stock inventories

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AGGREGATE CONTROL OF INVENTORIES

• Turnover ratios
• ABC product classification
• Inventory-to-Demand relationships
• Total investment limit
• Supply-Driven inventory control

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Figure 10-21 Examples of Several Poisson
Distributions of Demand during Lead Time
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Figure 10-22 Safety Stock Factor Curves for
Various Values of the Mean Demand during Lead Time
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Turnover Ratio
Turnover ratio Annual sales at inventory cost
Average inventory
investment
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Optimal Inventory
Where the optimal amount of inventory to
stock, if consolidated into one location in
dollars, pounds, cases or other units
the amount of inventory in each of n locations
in the same units as the number of
stocking locations before consolidation
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BUSINESS LOGISTICS SYSTEMS ANALYSIS
Lecture 29PIPELINE FILLING
Assignment P20

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Business Systems Logistics Analysis
Inventory Strategy
Transport Strategy

• Forecasting
• Storage fundamentals
• Inventory decisions
• Purchasing and supply
• scheduling decisions
• Storage decisions

• Transport fundamentals
• Transport decisions

Customer Service Goals

• The product
• Logistics service
• Information systems

Location Strategy

• Location decisions
• The network planning process

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