Methodology and model-based DSS to managing the reallocation of inventory to orders in LHP situations. Application to the ceramics sector

Lack of homogeneity in the product (LHP) is a problem when customers require homogeneous units of a single product. In such cases, the optimal allocation of inventory to orders becomes much more complex. Furthermore, in an MTS environment, an optimal initial allocation may become less than ideal over time, due to different circumstances. This problem occurs in the ceramics sector, where the final product varies in tone and calibre. This paper proposes a methodology for the reallocation of inventory to orders in LHP situation (MERIO-LHP) and a model-based decision-support system (DSS) to support the methodology, which enables an optimal reallocation of inventory to order lines to be carried out in real businesses environments in which LHP is inherent. The proposed methodology and model-based DSS were validated by applying it to a real case at a ceramics company. The analysis of the results indicates that considerable improvements can be obtained with regard to the quantity of orders fulfilled and sales turnover.