Risk-pooling along a fixed delivery route using a dynamic inventory-allocation policy
Article Abstract:
A replenishment and allocation problem involving N retailers sited along a fixed delivery route is examined. In the problem, each retailer faces period demand that is independent and normally distributed, and experiences a proportional backorder cost on net inventory at the end of the period. In the problem, the warehouse forwards a replenishment order every m period, one that is accepted after a fixed leadtime of T periods. Upon acceptance, delivery vehicles transport the replenishment quantity to the retailers along the route with fixed leadtimes between deliveries. Dynamic and static solutions to this problem are considered with the assumption that the warehouse carries no inventory. Analytical results obtained prove that the risk-pooling incentive is always positive. They also demonstrate that dynamic allocation policies result in lower costs than static policies.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
Setting planned leadtimes in serial production systems with tardiness costs
Article Abstract:
Calculation of optimal planned lead times is discussed for serial production systems in which processing and procurement times may be stochastic. The goal is to cut the total of inventory holding expenses and job tardiness, given a specified due-date. A general solution procedure is presented for two-stage serial systems, which for most lead time distributing and cost structures is a single-pass algorithm. It is also shown how the procedure is extendable to N-stage systems. Computational results are presented which offer some insight into the qualities of optimal safety time policies.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1987
User Contributions:
Comment about this article or add new information about this topic:
A model for assessing the value of warehouse risk-pooling over outside-supplier leadtimes
Article Abstract:
A multi-location inventory model for exploring the value of warehouse risk-pooling in high service-level environments is developed. Two alternative systems for a similar number of retailers are developed. In one system each retailer operates independently, while in the other system retail orders are shipped to a warehouse which passes the orders on to individual retailers. The results indicate that the second systems ability to pool risk over outside supplier leadtime is dependent on the system's pipeline inventory holding cost.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1989
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: No Growing Pains for Year-old Pickup. Speedy Growth Heating Up Inflation
- Abstracts: Variability reduction through operations reversal. Economic models for vendor evaluation with quality cost analysis
- Abstracts: Capacitated lot sizing with setup times. Coordinating production and inventory to improve service. Heuristics for multilevel lot-sizing with a bottleneck
- Abstracts: Multidivisional structure and performance: the contingency of diversification strategy. Diversification strategy and R&D intensity in multiproduct firms
- Abstracts: Beyond simple demographic effects: the importance of relational demography in superior-subordinate dyads. New wrinkles in the theory of age: demography, norms, and performance ratings