Fill-Rate Optimization in a One-Warehouse N-Identical Retailer Distribution System

Article Abstract:

This paper examines the system fill-rate of a one-warehouse N-identical retailer distribution system as a function of warehouse and retailer safety stock. Using the approximation model of Deuermeyer and Schwarz (1981) we examine the problem of maximizing system fill-rate subject to a constraint on system safety stock. Optimal safety stock policy is characterized to be the intersection of a fill-rate policy line and the safety stock budget line. Properties of fill-rate policy lines are given. These properties may be used to provide managerial insight into system optimization and as the basis for heuristics. One heuristic, the vertical heuristic, based on the corresponding deterministic version of the problem, yields trivially simple and near-optimal policies. (Reprinted by Permission of Publisher.)

Management science, Marketing, Warehousing, Inventory Control, Models, Optimization, Heuristic Methods, Approximation

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One warehouse multiple retailer systems with vehicle routing costs

Article Abstract:

The adoption of efficient inventory replenishment strategies can affect important cost reductions and service improvements in many distribution systems. These strategies are often dependent on economies of scale which can be achieved by combining deliveries to different locations into efficient routes. The requisite logistical planning functions necessitate an integrated approach, specifically, the close coordination of inventory control and transportation planning. Long-term integrated replenishment strategies that minimize transportation and inventory costs while enabling retailers to meet demand can be affected by determining route sales distribution systems through the use of a model utilizing low complexity heuristics.

Management, Distribution of goods, Distribution (Commerce)

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Myopic policies for some inventory models with uncertain demand distributions

Article Abstract:

An inventory management system based on a key fractile can be optimal or almost optimal in some inventory models with parameter adaptive demand processes. In these models, some parameter of the demand distribution are unknown, and approximations of the parameter are statistically updated as demand is examined over time. Bounds of the value loss relative to cost, when employing the key fractile policy, can be computed directly from the data.

Materials management

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