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Assessment of stock size to minimize cutting stock production costs

Author

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  • Erjavec, J.
  • Gradisar, M.
  • Trkman, P.

Abstract

A method for assessing the optimal stock size for the expected order size for a single-period one-dimensional cutting stock problem is proposed. The stock size is optimal when the expected total costs of trim loss, warehousing, and non-fulfilment are minimum. The stock size is the sum of all bar lengths in the stock, and the order size is the sum of shorter bar lengths in various numbers of pieces. Using simulated test cases, a statistical estimation of optimal stock size is conducted, which in our case is approximately 50% above the expected order. The proposed method can help company choose the appropriate level of stock to minimize their total costs.

Suggested Citation

  • Erjavec, J. & Gradisar, M. & Trkman, P., 2012. "Assessment of stock size to minimize cutting stock production costs," International Journal of Production Economics, Elsevier, vol. 135(1), pages 170-176.
    • Handle: RePEc:eee:proeco:v:135:y:2012:i:1:p:170-176
    DOI: 10.1016/j.ijpe.2010.10.001
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    References listed on IDEAS

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    2. Lin Liu & Xinbao Liu & Jun Pei & Wenjuan Fan & Panos M. Pardalos, 2017. "A study on decision making of cutting stock with frustum of cone bars," Operational Research, Springer, vol. 17(1), pages 187-204, April.
    3. Cui, Yaodong & Yang, Liu & Zhao, Zhigang & Tang, Tianbing & Yin, Mengxiao, 2013. "Sequential grouping heuristic for the two-dimensional cutting stock problem with pattern reduction," International Journal of Production Economics, Elsevier, vol. 144(2), pages 432-439.
    4. D. N. Nascimento & S. A. Araujo & A. C. Cherri, 2022. "Integrated lot-sizing and one-dimensional cutting stock problem with usable leftovers," Annals of Operations Research, Springer, vol. 316(2), pages 785-803, September.

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