Showing papers on "Service level published in 1989"

Effects of pooling on the optimization and service levels of two-location inventory systems

Abstract: The study of inventory distribution systems with two locations and random demand is the subject of this paper. It is shown that under certain conditions a policy of complete pooling between the locations minimizes the expected costs for the system. A solution procedure is proposed for the derivation of the optimal parameters determining the ordering and lateral transshipmentrules. Relationships between the measures of service level before and after pooling are derived, and it is concluded that pooling always improves the service levels at both locations. Minimization of total costs'subject to service level constraints is also studied. Numerical examples serve to illustrate the analytical results. Handled by the Editor-In-Chief.

Optimal Inventory Policies with Service-Level Constraints

Abstract: In a practical situation it is often difficult to determine the value of the shortage costs for use in in ventory-control systems. However, in cost-minimization problems including service-level constraints, shortage costs are implicitly prevailing. With the purpose of exploring these relations, a continuous review (Q, r) stock-control system is considered, where the order points and lot sizes are computed simultaneously. Instead of explicitly expressing the shortage cost in the objective function, it is taken into consideration through a service-level constraint. The shadow price of this constraint can in some sense be interpreted as the shortage cost corresponding to the requested service level. By changing the value of the service level, interesting relations between shortage costs and service levels can be viewed for different sets of other inventory parameters. In order to investigate the sensitivity for probabilistic variations in the input data, two different probability distributions are used to describe the lead-time demand.

A model for use in the rationing of inventory during lead time

Abstract: While the traditional solution to the problem of meeting stochastically variable demands for inventory during procurement lead time is through the use of some level of safety stock, several authors have suggested that a decision be made to employ some form of rationing so as to protect certain classes of demands against stockout by restricting issues to other classes. Nahmias and Demmy [10] derived an approximate continuous review model of systems with two demand classes which would permit an inventory manager to calculate the expected fill rates per order cycle for high-priority, low-priority, and total system demands for a variety of parameters. The manager would then choose the rationing policy that most closely approximated his fill-rate objectives. This article describes a periodic review model that permits the manager to establish a discrete time rationing policy during lead time by prescribing a desired service level for high-priority demands. The reserve levels necessary to meet this level of service can then be calculated based upon the assumed probability distributions of high- and low-priority demands over lead time. The derived reserve levels vary with the amount of lead time remaining. Simulation tests of the model indicate they are more effective than the single reserve level policy studied by Nahmias and Demmy.

Managing Quality Customer Service

Abstract: This practical, self-study book was developed to help you establish and manage a quality service operation. Learn how to determine customer needs, how to effectively and efficiently meet those needs, and how to continually measure your service level. Coverage includes- To show how to set quality service standards To identify characteristics of a winning customer-service team To provide proactive customer-service problem solving To explain customer-service audits and feedback

Warrants and guidelines for installation of guardrail

Abstract: Kentucky, as most other states, has in the past relied on the AASHTO "Barrier Guide" for guidance in the installation of guardrail. Additional information related to barrier selection and installation was recently published in the form of the AASHTO "Roadside Design Guide". However, considerable judgement is required for application of this information and it was determined that significant benefit could be derived from development of guidelines representative of conditions in Kentucky. Listed below are significant results from this study. 1) Results from a previous survey of guardrail standards and guidelines were summarized and it was found that only a few states suggested use of reduced guardrail standards. 2) Warranting guidelines for clear zones and embankments based on Kentucky accident severities and costs were developed from a computer program included as part of the "Roadside Design Guide". 3) For low service level roads, several operational barrier systems were recommended for consideration when the W-beam, blocked-out guardrail is found to be impractical due to geometric, terrain, or cost constraints. 4) A procedure was developed to identify and prioritize highway sections in need of guardrail based on determining locations with critical numbers and rates of run-off-road accidents, conducting a field survey to tabulate hazard-index points, and performing a cost-effectiveness analysis (A).

Scientific inventory planning in materials management.

Abstract: This is all just one example of how computer and appropriate analytical software routines can improve the fiscal and physical efficiency of the hospital materials management department. Together, they can provide logical, unemotional guidelines for purchase quantities, reorder points and safety stocks. Once a computer based materials management tool is in place and the materials manager has appropriate software at his or her disposal, a whole array of other possibilities can open up. For example, with appropriate analytical software and about six months of data, materials managers can estimate the performance of a current inventory system, comparing it to the expected results of upgrading current software. In effect, you can predetermine the cost-effectiveness of embedding economic order quantities, reorder points and service level policy routines before committing to such a course. Another valuable tool for materials management is "cost/use variance" software, which can pinpoint quickly and by line item whether inventory costs are rising due to higher vendor costs or to expanded use of products, and what percent each represents. A natural extension of this is an ABC analysis to identify groups of line items deserving more or less intense management. Continuous vendor performance tracking is another candidate for analytical software. The cost consequences of partial, late or missed deliveries can be severe, and delivery documentation becomes critical if the hospital has a performance liability agreement with the vendor. Other analytical software may permit dramatic improvement in storeroom labor efficiency through logical stock location schemes. In short, the basic formulas for scientific inventory management are only the beginning of a complex materials management story.

A Simulation Model for a Production Distribution System

Abstract: The problems and drawbacks of the Physical Distribution System (PDS) of a production company are described. A simulation model which takes into consideration the activities of the PDS and some part of the production system of the company are presented. Using this simulation model, experiments have been performed to find the effect of certain critical variables like service level, lead times and production rate on the total cost. The limitations of this study and potential areas of future work are assessed.

Bank Deposit Rate Deregulation and Customer Service Levels

Abstract: Bank Deposit Rate Deregulation and Customer Service Levels The commercial banking industry may be subject to inherent instability problems that could lead to significant disruptions in consumer transaction activity. As a result, banking is one of the more regulated industries in the United States. The services provided are considered essential, and significant concern exists about the consumer's ability to have adequate access to low-priced banking services without regulatory oversight. While the recent legislative trend is toward relaxing some of these restrictions, significant disagreement still exists over the resulting impact on consumers (Gross 1987; Kutler 1987; Thomas 1988). The banking industry is unique because the degree of regulation aimed at protecting consumers varies significantly by state, e.g., state-determined entry and expansion restrictions and allowable organization structure. As a result, the industry is a useful testing ground in which to measure the impact of policy-induced competitive restrictions on consumer welfare. One result of these restrictions has been to increase the use of alternative forms of nonprice competition (White 1976; Lloyd-Davies 1977; Sealey 1979; Rogowski 1984; Hanweck and Rhoades 1984) and elimination of the restrictions may significantly alter industry behavior (Weisbrod 1980; Petersen 1981; Berger and Hannan 1987). For example, it has been argued that the recent elimination of bank deposit rate ceilings will result in a significant change in pricing procedures for all bank services. Significant societal effects could result as consumers are serviced by firms more accountable to the forces of the marketplace. At issue is whether or not customers will lose some of the benefits resulting from nonprice competition. In this paper the impact of deposit rate deregulation on the influence of regulated bank entry barriers on customer service levels is evaluated. Specifically, liberal entry has been shown to result in preferred service levels to bank customers--measured as the absolute number, per capita number, or proximity of banking facilities to the consumer (Savage and Humphrey 1979; Seaver and Fraser 1979; Evanoff 1988). However, this improved service may have resulted from the existence of interest rate ceilings on deposits that have caused banks to overinvest in real physical capital. That is, without the ability to compete directly by price, a form of nonprice competition was employed in which more offices provided improved service accessibility or convenience. As deregulation occurs, banks may change pricing procedures to eliminate previously subsidized prices and to maintain profit levels in reaction to rising, unregulated interest payments. This may result in a decrease in the number of bank facilities as those opened as a nonprice means of competing may not be viable once more direct price competition is allowed. Thus, competitive deposit rates may be realized only at the expense of decreases in customer service. A model is developed to explain the number of bank offices per service area, a service accessibility measure, and a variant of that model is used to show empirically how the service level is influenced by entry restrictions, i.e., branching restrictions. Once developed, estimates are provided for periods both prior to and after rate deregulation. If the benefits from liberal entry result mainly from nonprice competition, one would expect to see a decline in service levels in recent years due to the elimination of the need to compete on a nonprice basis. Thus, we would expect to see a shift in the relationship between the service level and its determining factors. If branching continues to lead to preferred service levels, the positive impact of branching is strongly reinforced and concerns about potential declines in customer service may be unwarranted. Our results suggest that the social benefits from liberal entry are significant, are not excessively influenced by nonprice competition, and, therefore, remain after interest rate deregulation. …