A model of incentive contracts for just-in-time delivery

Article Abstract:

A technique for choosing incentives that can aid buyers in improving on-time delivery performance is proposed to solve the problem of how to structure on-time delivery incentives in a contract between a buyer and a supplier when early shipments are forbidden. The buyer chooses incentives according to the supplier's cost-minimizing response to incentives. A probability of on-time delivery and an incentive scheme to attain that probability determine the least cost incentive that a buyer can select. Results show that achieving exactly 100% on-time delivery is non-optimal and only feasible under certain conditions.

Incentives (Business), Just in time inventory systems, Just in time systems

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Optimal control of a dual service rate M/M/1 production-inventory control

Article Abstract:

A dual-source, production-inventory model is presented in which the processing times at a premier manufacturing resource and a second, contingent source, interpreted as a subcontractor, are exponentially distributed. The inventory and contingent sourcing policies are treated as decision variables in an analytical study and in addition, allow the primary manufacturing capacity to be a decision variable in a subsequent numerical study. It is proved that a stationary, non-randomised inventory and subcontracting policy is optimal for our M/M/1 dual-source model and moreover, that dual-base stock policy is optimal.

Analysis, Usage, Queuing theory, Processing modes

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On the Hungarian inventory control model

Article Abstract:

An interpretation of the Hungarian inventory control model of Prekopa A. is presented. Further development of the model is also presented.

Hungary, Criticism and interpretation, Works, A., Prekopa

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