The joint effect of leadtime variance and lot size in a parallel processing environment
Article Abstract:
A basic inventory system involving one item and one location is examined. The system follows a continuous-review (r, q) policy, with r being the reorder point and q the lot size. In this (r, q) system, the demand is a Poisson process, all stockouts are backordered, while the leadtimes are independent, identically-distributed random variables. The combined impact of the lot size q and the leadtime variance on performance is analyzed. It is shown that performance can be negatively affected by the leadtime variance for larger q. Two simple approximations are tested to investigate this effect. One of these approximations disregards the leadtime variance while the other detects the variance through a combination of two limiting approximations.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1996
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The dynamic and stochastic knapsack problem with deadlines
Article Abstract:
A new model for dynamic and stochastic resource allocation problem is developed and analyzed. This knapsack problem seeks to incorporate the dynamic and stochastic properties of the setting of real-world systems. It is characterized by a limited resource, resource requests that arrive stochastically, random demands for the resource, a time deadline for accepting requests, real-time decisions on acceptance or rejection and the maximization of expected rewards generated by the deadline. The Dynamic and Stochastic Knapsack Problem with Deadlines have a number of real-world applications, including accepting loan requests, taking restaurant reservations, scheduling a batch processor, and selling tickets for sports events or air travel.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1996
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Inventory control with information about supply conditions
Article Abstract:
An inventory-control model that includes a detailed Markovian model of the resupply system is introduced. Unlike standard models where the order leadtime is a fixed constant or a random variable with a fixed distribution, the new model involves a supply system whose replenishment leadtimes evolve as it changes over time. The optimal policy adopted by the two types of models are structured in the same way, but the new model has parameters that respond dynamically to current supply conditions. It is shown that, in such a setting, the popular belief that longer leadtimes imply more inventory does not hold true. It is demonstrated that while leadtimes are important, the concept of order coverage should not be neglected.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1996
User Contributions:
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