Deux Chemicals Inc. Goes just-in-time

Moshe Dror, Kenneth R. Smith, Candace Arai Yano

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Deux Chemicals Inc. (a pseudonym) decided to offer its customers reliable just-in-time delivery to reduce the customers' need to hold chemicals that are difficult and expensive to store. Although its manufacturing facilities are reliable, they occasionally require unscheduled repairs that could take up to three weeks to complete. To ensure reliable supply to its customers, Deux Chemicals holds safety stock; however, it needed to determine how much additional storage capacity it would require to support its just-in-time promise. We present a methodology to determine safety-stock levels and storage capacity requirements to achieve high levels of customer service, and a production control policy that helps to minimize safety stock and storage needs. The methodology enabled Deux Chemicals to identify an economical strategy for safety stock and its storage that will allow the company to significantly reduce its risk of shortages.

Original languageEnglish (US)
Pages (from-to)503-515
Number of pages13
JournalInterfaces
Volume39
Issue number6
DOIs
StatePublished - Nov 1 2009

Keywords

  • Capacity expansion
  • Chemical industry
  • Inventory/production: stochastic
  • Reliability: maintenance/repairs

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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