Optimising the batch sizes and inventory parameters for Twentsche Kabelfabriek BV

In this study, we create insights in the setup and inventory holding cost and use these insights to calculate the optimal batch size. The optimal batch size will then make sure that the combined cost of setup and inventory holding are optimized. This is although not completely solving TKF’s problem since also lead times, review period, demand, and service levels are involved. Therefore, we implemented Bijvank’s algorithm to make sure also demand uncertainty, service level agreements with customers, production lead time, and inventory review period are also taken into consideration. For this reason, two models are created. One for the optimal batch size calculation and one for the determination of the optimal inventory parameters.