HMS 2016 Proceeding

An information fractal for supply network inventory optimisation

Authors:   S. M. Saad, R. Bahadori


This paper develops a new conceptual framework for an information fractal to optimise inventory across the supply network by identifying the optimum safety stock, inventory policy and cycle stock with the lowest logistics cost as well as out of stock prevention. The proposed framework consists of two levels top and bottom level fractals. Fractals in the bottom level analyse demand, optimise safety stock and recommend an inventory policy. Then transmit output to the top level fractal to investigate the effect of different replenishment frequencies to determine the optimum cycle stock for each fractal in the bottom level by integrating the inventory holding costs and transportation costs to minimise the logistics cost. The proposed framework provides a systematic method through which practitioners are able to decide upon the demand analysis, safety and cycle stock optimisation.

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