Volume 1, Issue 3, June 2013, Page: 42-52
Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers
Faraj El Dabee, School of Engineering, University of South Australia, South Australia, Australia
Romeo Marian, School of Engineering, University of South Australia, South Australia, Australia
Yousef Amer, School of Engineering, University of South Australia, South Australia, Australia
Received: May 14, 2013;       Published: Jun. 30, 2013
DOI: 10.11648/j.acis.20130103.12      View  3024      Downloads  138
Abstract
In many organisations, Just-In-Time (JIT) implementation plays a significant role in minimizing their excessive costs, and increasing their efficiency. However, the risks accompanying JIT strategies are often overlooked and affect system processes disrupting the entire chain of supply. This paper proposes an inventory model that can simultaneously reduce costs and risks in JIT systems. This model is developed in order to ascertain an optimal ordering strategy for procuring raw materials by using multi-external suppliers and local backup supplier to reduce the total cost of the products, and at the same time to reduce the risks associated with JIT supply within production systems. The effectiveness of the developed model is tested using an example problem with inbuilt disruption. A comparison between the cost of using the JIT system and using the inventory system shows the superiority of the use of the inventory policy.
Keywords
Lean Manufacturing, Just-In-Time (JIT), Production System, Cost-Risk Reduction, Inventory Model, External Supplier, Local Backup Supplier
To cite this article
Faraj El Dabee, Romeo Marian, Yousef Amer, Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers, Automation, Control and Intelligent Systems. Vol. 1, No. 3, 2013, pp. 42-52. doi: 10.11648/j.acis.20130103.12
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