A Multi-Echelon Inventory Management Framework for Cost Optimization in a Coffee Shop Supply Chain Using (R, s, S) Policies
DOI:
https://doi.org/10.53848/jlsco.v12i1.280650Keywords:
Multi-Echelon inventory system, Hybrid policy, (R, s, S) policy, Coffee shop supply chainAbstract
The purpose of this research was to present a multi-level inventory management framework designed for a corporate structure with a single distribution center and multiple branches. The model employs a two-level inventory approach, specifically designed for handling diverse product categories, by utilizing a hybrid ordering system. At the core of this framework is a composite inventory policy, denoted as (R, s, S), which effectively manages product demand using statistical probability distributions—a critical consideration in retail operations. Additionally, the model accounts for fixed lead times associated with the transfer of products between the distribution center and its branches, ensuring timely replenishment. The framework’s efficacy is demonstrated through a case study involving a large coffee shop enterprise managing 172 distinct products. The case study reveals that the proposed model not only streamlines inventory planning but also significantly reduces inventory management costs. When compared to traditional methods, the framework achieves a monthly cost reduction from 22,849.05 baht, marking a 2.32% decrease. This reduction highlights the model's potential for improving operational efficiency and cost-effectiveness across various product lines. In summary, this approach offers a robust solution for multi-level inventory management, enabling organizations to optimize their inventory processes and realize substantial cost savings.
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