5,807 research outputs found
A dynamic rationing policy for continuous-review inventory systems
Stock rationing is an inventory policy that allows differential treatment of customer classes without using separate inventories. In this paper, we propose a dynamic rationing policy for continuous-review inventory systems, which utilizes the information on the status of the outstanding replenishment orders. For both backordering and lost sales environments, we conduct simulation studies to compare the performance of the dynamic policy with the static critical level and the common stock policies and quantify the gain obtained. We propose two new bounds on the optimum dynamic rationing policy that enables us to tell how much of the potential gain the proposed dynamic policy realizes. We discuss the conditions under which stock rationing - both dynamic and static - is beneficial and assess the value of the dynamic policy. © 2009 Elsevier B.V. All rights reserved
On stock rationing policies for continuous review inventory systems
Cataloged from PDF version of article.Rationing is an inventory policy that allows prioritization of different demand
classes. In this thesis, we analyze the stock rationing policies for continuous
review systems. We clarify some of the ambiguities present in the current
literature. Then, we propose a new method for the exact analysis of lot-for-lot
inventory systems with backorders under rationing policy. We show that if
such an inventory system is sampled at multiples of supply leadtime, the state
of the system evolves according to a Markov chain. We provide a recursive
procedure to generate the transition probabilities of the embedded Markov
chain. It is possible to obtain the steady-state probabilities of interest with
desired accuracy by considering a truncated version of the chain. Finally, we
propose a dynamic rationing policy, which makes use of the information on
the status of the outstanding replenishment orders. We conduct a simulation
study to evaluate the performance of the proposed policy.Bulut, ÖnderM.S
E-Fulfillment and Multi-Channel Distribution – A Review
This review addresses the specific supply chain management issues of Internet fulfillment in a multi-channel environment. It provides a systematic overview of managerial planning tasks and reviews corresponding quantitative models. In this way, we aim to enhance the understanding of multi-channel e-fulfillment and to identify gaps between relevant managerial issues and academic literature, thereby indicating directions for future research. One of the recurrent patterns in today’s e-commerce operations is the combination of ‘bricks-and-clicks’, the integration of e-fulfillment into a portfolio of multiple alternative distribution channels. From a supply chain management perspective, multi-channel distribution provides opportunities for serving different customer segments, creating synergies, and exploiting economies of scale. However, in order to successfully exploit these opportunities companies need to master novel challenges. In particular, the design of a multi-channel distribution system requires a constant trade-off between process integration and separation across multiple channels. In addition, sales and operations decisions are ever more tightly intertwined as delivery and after-sales services are becoming key components of the product offering.Distribution;E-fulfillment;Literature Review;Online Retailing
Computation of order and volume fill rates for a base stock inventory control system with heterogeneous demand to investigate which customer class gets the best service
We consider a base stock inventory control system serving two customer classes whose demands are generated by two independent compound renewal processes. We show how to derive order and volume fill rates of each class. Based on assumptions about first order stochastic dominance we prove when one customer class will get the best service. That theoretical result is validated through a series of numerical experiments which also reveal that it is quite robust.Base stock policy; service measures; two customer classes; compound renewal processes
A Stochastic Dynamic Programming Approach to Revenue Management in a Make-to-Stock Production System
In this paper, we consider a make-to-stock production system with known exogenous replenishments and multiple customer classes. The objective is to maximize profit over the planning horizon by deciding whether to accept or reject a given order, in anticipation of more profitable future orders. What distinguishes this setup from classical airline revenue management problems is the explicit consideration of past and future replenishments and the integration of inventory holding and backlogging costs. If stock is on-hand, orders can be fulfilled immediately, backlogged or rejected. In shortage situations, orders can be either rejected or backlogged to be fulfilled from future arriving supply. The described decision problem occurs in many practical settings, notably in make-to-stock production systems, in which production planning is performed on a mid-term level, based on aggregated demand forecasts. In the short term, acceptance decisions about incoming orders are then made according to stock on-hand and scheduled production quantities. We model this problem as a stochastic dynamic program and characterize its optimal policy. It turns out that the optimal fulfillment policy has a relatively simple structure and is easy to implement. We evaluate this policy numerically and find that it systematically outperforms common current fulfillment policies, such as first-come-first-served and deterministic optimization.revenue management;advanced planning systems;make-to-stock production;order fulfillment
Finding optimal policies in the (S - 1, S ) lost sales inventory model with multiple demand classes
This paper examines the algorithms proposed in the literature forfinding good critical level policies in the (S-1,S) lost salesinventory model with multiple demand classes. Our main result isthat we establish guaranteed optimality for two of thesealgorithms. This result is extended to different resupplyassumptions, such as a single server queue. As a corollary, weprovide an alternative proof of the optimality of critical levelpolicies among the class of all policies.inventory;customer differentiation;multiple demand classes;rationing lost sales;stochastic dynamic programming
Revenue Management and Demand Fulfillment: Matching Applications, Models, and Software
Recent years have seen great successes of revenue management, notably in the airline, hotel, and car rental business. Currently, an increasing number of industries, including manufacturers and retailers, are exploring ways to adopt similar concepts. Software companies are taking an active role in promoting the broadening range of applications. Also technological advances, including smart shelves and radio frequency identification (RFID), are removing many of the barriers to extended revenue management. The rapid developments in Supply Chain Planning and Revenue Management software solutions, scientific models, and industry applications have created a complex picture, which appears not yet to be well understood. It is not evident which scientific models fit which industry applications and which aspects are still missing. The relation between available software solutions and applications as well as scientific models appears equally unclear. The goal of this paper is to help overcome this confusion. To this end, we structure and review three dimensions, namely applications, models, and software. Subsequently, we relate these dimensions to each other and highlight commonalities and discrepancies. This comparison also provides a basis for identifying future research needs.Manufacturing;Revenue Management;Software;Advanced Planning Systems;Demand Fulfillment
An overview of inventory systems with several demand classes
In this chapter we discuss inventory systems where
several demand classes may be distinguished. In particular, we focus on single-location inventory systems and we analyse the use of a so-called critical level policy. With this policy some inventory is reserved for high-priority demand. A number of practical examples where
several demand classes naturally arise are presented, and the implications and modelling of the critical level policy in distribution systems are discussed. Finally, an overview of the
literature on inventory systems with several demand classes is given
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