Course syllabus

Material- och produktionsstyrning
Production and Inventory Control

MIOF10, 7,5 credits, G2 (First Cycle)

Valid for: 2014/15
Decided by: Education Board B
Date of Decision: 2014-04-14

General Information

Elective for: E4-pla, I4, I4-lp, I4-pr, I4-mf, M4-lp
Language of instruction: The course will be given in English


The course aims to give basic knowledge and understanding of methods for management of production and inventory systems, both from a theoretical and applied perspective.

Learning outcomes

Knowledge and understanding
For a passing grade the student must

have knowledge and understanding in the following areas:

 be able to use basic quantitative methods for management and evaluation of production and inventory systems
 show the ability to independently solve basic project assignments of investigative nature.

This means that the student is required to:
  understand and able to apply methods for demand forecasting.
  understand and able to apply deterministic network scheduling.
  understand the basic principles of Just-in-time production
  understand the basic principles of Push and Pull systems.
  understand the principles for hierarchical planning of production and personnel and  scheduling.
  understand and apply Material requirements planning (MRP).
  understand and apply quantitative models for control of single echelon inventory systems with deterministic demand. This involves the EOQ-model and some related variants.
  understand different principles for determining cost parameters (such as holding costs, shortage costs and set up costs) commonly used in production and inventory control models.
  be able to explain and apply quantitative models for control of single echelon inventory systems with stochastic demand. 
  be able to explain and apply basic quantitative models for joint replenishments and order coordination in single echelon inventory systems.
  be able to explain and apply quantitative models for control of multi-echelon inventory systems with deterministic demand. 
  understand and use the concept of service levels, and relate models with service levels to penalty cost models.
  be able to explain and use quantitative basic methods for analysis of echelon- and installation-stock inventory control policies.
  be able to explain and use quantitative methods for lot sizing in multi-echelon systems with deterministic demand.
  be able to explain and use quantitative methods for cyclic scheduling.

Competences and skills
For a passing grade the student must

the skills and abilities to independently formulate, solve, and use relevant basic quantitative models for analysis and control.
Concrete areas and model types that the student should master include:
    Aggregate production planning (LP and MIP models)
    Stochastic models for evaluation and optimisation of single-echelon systems under different assumptions: continuous review, continuous normally distributed demand, discrete compound Poisson demand, deterministic demand, complete backordering, service levels (Serv1,Serv2) and backorder costs, (R,Q), (S-1,S) systems.
    Stochastic models for evaluation and optimisation of multi-echelon (supply chain) inventory systems under different assumptions: serial systems, (S-1,S) and (R,Q) policies, echelon-stock versus installation-stock policies, lot sizing under deterministic demand.
    Methods for cyclic planning such as: the independent solution, common cycle time, the Doll-Whybark algorithm.
    Methods for demand forecasting, such as: moving average, exponential smoothing, exponential smoothing with trend, forecast errors, MAD.
    Deterministic inventory models with time varying demand, such as: Silver-Meal, Wagner-Whitin.
    Methods for line balancing, such as: Positional weight technique.


The course focuses on basic methods for production and inventory control. The methods developed in the course are beased on
theory and concepts from both probability theory and managerial economics. One important aspect of the course is to develop the
students skills in how to model and analyze a real life inventory- and production control problem. For example, how should reorder
points and batch quantities be chosen such that minimum costs are attained.

Examination details

Grading scale: TH
Assessment: The examination is a written exam and a number of home-assignments. The final grade is based on the result from the written exam.

Code: 0110. Name: Production and Inventory Control.
Credits: 7,5. Grading scale: TH.
Code: 0210. Name: Practical Work.
Credits: 0. Grading scale: UG.


Required prior knowledge: MIO012/MIOA01 Managerial Economics Basic Course, FMS012 Mathematical Statistics Basic Course (or equivalent).
The number of participants is limited to: No
The course overlaps following course/s: MIO030

Reading list

Contact and other information

Course coordinator: Universitetslektor Fredrik Olsson,
Course homepage: