i

CANDIDATES DECLARATION





It is hereby declared that this thesis or any part of this has not been submitted elsewhere for the
award of any degree or diploma except for publication



Nazmus Sakib
Roll No. 075009



Md. Saiful Islam
Roll No. 075013
Department of Industrial and Production Engineering
Rajshahi University of Engineering and Technology
Rajshahi-6204
Bangladesh







ii

Nomanclature

Terms Explanation
(ELS) The economic lot sizing problem
(ERP) Enterprise resources planning systems
(APS) Advanced planning and scheduling systems
(EOQ) Economic order quantity
(MLLS) Multi level lot sizing
(SM) SilverMeal
(WWA) Wagner-Whitin Algorithm
(EOC) Early order commitment
(EOQJR) Economic Order Quantity with Joint Replenishment
(BLL) Bangladesh Lamps Limited
(TEL) Transcom Electronics Ltd
(GLS) General Lamps System
(FTL) Florescent Tube Light
(CFL) Compact florescent Light
(TRCUT) Total replenishment cost per unit time







iii

Table of contents
Page Number
Declaration...... i
Nomenclature.......... ii
Table of contents..... iii
List of figures.......... v
List of tables............ v
Acknowledgement... vii
Abstract................... viii

CHAPTER 1 INTRODUCTION Page Number

1.1 Problem Statement.. 2
1.2 Investigative questions 2
1.3 Research approach.. 2
1.4 Methodology 3
1.5 The Scientific Method. 3
1.6 Steps of the Scientific Method 4
1.7 Organizational structure.. 5
1.8 Findings... 5

CHAPTER 2 LITERATURE REVIEW Page Number

2.1 Previous Researchers opinion on various problems.. 6
2.2 Uncapacited dynamic lot sizing model 9
2.3 Capacited dynamic lot sizing model ... 9

CHAPTER 3 THEORETICAL BACKGROUND Page Number

3.1 What is inventory? . 11
3.2 Relevant Costs 13
3.3 Historical Views of Inventory systems.. 15
3.3.1 Inventory Lot-sizing policies.. 15
3.3.2 Information sharing. 15
3.3.3 Early order commitment. 15
3.3.4 Continuous Review Inventory Systems. 16
3.3.5 Order-Point, Order-Quantity (s, Q) System 16
3.3.6 Demand Pattern.. 17
3.3.7 Inventory Costs 17




iv

CHAPTER 4 CASE STUDY AND DATA COLLECTION Page Number

4.1 Case study... 19
4.2 Products 19
4.3 Data Collection 21

CHAPTER 5 RESULT AND RESULT ANALYSIS Page Number

5.1 Data and parameters 23
5.2 Calculations 24
5.3 Result analysis. 32

CHAPTER 6 RECOMMENDATION 34
CHAPTER 7 CONCLUSION 35

Reference 36
Appendix 39
















v

List of the tables
Table Number Name of the tables Page number
Table 1-1 Characteristics of Scientific Research 03
Table 1-2 Five Steps of the Scientific Method 04
Table 3-1 Inventory Functional Factors.. 12
Table 3-2 Reasons for Holding Inventory. 13
Table 4-1 Bill of materials of CFL.. 22


List of figures
Figure Number Name of the figure Page number
Figure 3-3 Inventory position Vs. Time 16
Figure 5-1 Cost difference for circuit 33
Figure 5-2 Cost difference for cover. 33
Figure 5-3 Cost difference for tube 33










vi

Acknowledgement

The authors express their sincere gratitude to their supervisor Khan Md. Ariful Haque,
Asst. Professor, Department of Industrial and Production Engineering, Rajshahi University of
Engineering and Technology (RUET) for his constant help and supervision. His guidance,
valuable suggestions and kindest supports throughout the preparation of this thesis are gratefully
acknowledged.
The authors are highly grateful to Ripon Kumar Chakrabortty, Lecturer, Department of
Industrial and Production Engineering, Rajshahi University of Engineering and Technology
(RUET) who support at different level of project work.
The authors also give thanks to the individuals who provided the necessary data,
information and suggestions during survey and thus sparing their valuable time.
Last but not the least the authors would like to express their heartfelt thanks to respected
teachers of the department and all those who helped them directly or indirectly in finishing the
thesis.













vii

Abstract

This paper investigates the eects of information sharing and early order
commitment on the performance of four inventory policies used by retailers in a supply
chain of one capacitated supplier and for retailers. Model parameters and operating
conditions are emulated from a local business supplying a standard product to its retailers.
Through computer simulation and subsequent analyses, we found that the inventory policy used
by the retailers, information sharing, and early order commitment can signicantly inuenced the
performance of the supply chain. This paper reviews the literature on single-level single-resource
lot sizing models and provides a survey of the literature dealing with inventory lot sizing
problems and other concepts considered in this area. The purpose of this dissertation is to
review the developments and to identify the status of existing literature in this area. Out of many
inventory policies examined, the Wagner Whitin algorithm and SilverMeal provide the best
performance for the supplier. The sharing of future order plans by the retailer and the supplier is
also shown to be the most eective way for reducing the suppliers cost and improving its
service level; however, the magnitude of these benets achieved is less for the retailers. In
addition, early order commitment by the retailers is found to be benecial to the supplier and
retailers in reducing their total cost.