Reformulated Silver-Meal and Similar Lot Sizing Techniques

Abstract

Literature and most textbooks around the world describe Silver-Meal in such a way that periods with zero demand make Silver-Meal suggest a higher frequency of order replenishments than necessary and therefore higher total costs than necessary. Silver-Meal, still the best-known technique, is therefore inferior to other lesser-known techniques when the time interval in the calculations presently is days and not months. The purpose of this article is to show that another mathematical formulation of Silver-Meal avoids this trouble. We also point to characteristics such as Silver-Meal, Least Unit Cost, Part-Period Balancing, and lot-sizing techniques that are available in many textbooks for operations and supply chain management. We illustrate the techniques with different examples of periods without demand, declining demand, and varying demand. We point out possible problems with the different techniques. Literature mostly does not consider periods of zero demand, which was not so important before. Lot-sizing methods must cope with the important performance indicator “Days of inventory”. Numerous practical situations with zero demand periods exist where a lot of sizing techniques help for efficient operations. It is necessary knowledge and a tool for students (future users, performers, and managers). “Lägsta periodkostnad” is a restored and reformulated Silver-Meal, with Silver-Meal’s characteristics already presented in literature, except those difficulties with zero demand periods disappear.