An (R,S)-Inventory Policy for Winter Maintenance Materials for the State of Ohio

by Brown, Nicholas Andrew

Winters in Ohio mean snow and ice, and with snow and ice come treacherous roads. Roads that become treacherous or impassable cost the state economically and socially. Thus to prevent this from happening road crews are out spreading salt on the roads before, during, and after a storm to promote safe travel. To provide the amount of salt needed to all counties of Ohio; individual counties stock up during the summer and fall, re-order to maintain inventory through the winter time, and finally allowing inventories to reduce towards the end of winter. During a mild winter salt not used and left in inventory ties up capital and requires the county to hold the salt until the next winter at a cost. An (R,S)-inventory policy was constructed to match salt inventories more closely with the demand in each Ohio county. The new salt ordering policies tie current decisions making to historical usage, and result in lower inventory levels in the simulation results, while maintaining required levels of service. The parameters for the inventory policy are derived using a demand model based on a linear regression model. The demand model was used to match past usage from 7 winter seasons with weather variables to calculate predictions of salt usage. A second method allows the inventory policy to be derived directly from the usage data when weather data is unavailable. A simulation approach was used to test the effectiveness of the policies and to establish several parameters in the implementation of the policies.