On two-echelon inventory systems with Poisson demand and lost sales

We derive approximations for the service levels of two-echelon inventory systems with lost sales and Poisson demand. Our method is simple and accurate for a very broad range of problem instances, including cases with both high and low service levels. In contrast, existing methods only perform well for limited problem settings, or under restrictive assumptions.\u

Linear integrated location-inventory models for service parts logistics network design

We present two integrated network design and inventory control problems in service-parts logistics systems. Such models are complicated due to demand uncertainty and highly nonlinear time-based service level constraints. Exploiting unique properties of the nonlinear constraints, we provide an equivalent linear formulation under part-warehouse service requirements, and an approximate linear formulation under part service requirements. Computational results indicate the superiority of our approach over existing approaches in the literature

Initial inventory levels for a book publishing firm = Kezdőkészletek egy könyvkiadó vállalatnál

Egy könyvkiadó vállalatot vizsgálunk. A kiadó kiadványait a szokásos értékesítési láncon (kis- és nagykereskedelem) keresztül értékesíti. A kérdés az, hogy egy új könyv példányait hogyan allokálja az értékesítési láncban. Feltételezzük, hogy a kereslet ismert, Poisson-eloszlású. A készletezés költségeit szintén ismertnek tételezzük fel. Cél a költségek minimalizálása. = The aim of the paper is to analyze a practical real world problem. A publishing house is given. The publishing firm has contacts to a number of wholesaler / retailer enterprises and direct contact to customers to satisfy the market demand. The book publishers work in a project industry. The publisher faces with the problem to allocate the stocks of a given, newly published book to the wholesaler and retailer, and to hold some copies to satisfy the customers direct from the publisher. The distribution of the demand is unknown, but it can be estimated. The costs consist of inventory holding and shortage, backorder costs. The decision maker wants to minimize these relevant costs. The problem can be modeled as a one-warehouse and N-retailer supply chain with not identical demand distribution. The problem structure is similar that of a newsvendor model. It is assumed that the demand distribution follows a Poisson distribution

A Single-Product Inventory Model for Multiple Demand Classes

We consider a single-product inventory system that serves multiple demand classes, which differ in their shortage costs or service level requirements. We assume a critical-level control policy, and show the equivalence between this inventory system and a serial inventory system. Based on this equivalence, we develop a model for cost evaluation and optimization, under the assumptions of Poisson demand, deterministic replenishment lead-time, and a continuous-review (Q, R) policy with rationing. We propose a computationally-efficient heuristic and develop a bound on its performance. We provide a numerical experiment to show the effectiveness of the heuristic and the value from a rationing policy. Finally, we describe how to extend the model to permit service times, and to embed within a multi-echelon setting

Inventory Management with the Internet-Based Direct Channel in a Two-Echelon Supply Chain System

We present a two-echelon dual-channel inventory model in which stocks are kept in both the manufacturer warehouse (upper echelon) and the retail store (lower echelon), and the product is available in two supply channels: the traditional retail store and the web-based direct channel. The system receives stochastic demand from two customer segments: those who prefer the traditional retail store and those who prefer the web-based direct channel. Any order placed through the direct channel is fulfilled through direct delivery from the manufacturer warehouse. When a stockout occurs in either channel, customers are willing to shift the channel with a known probability. Customers who are unwilling to shift the channel result in lost sales. In order to develop operational measures of supply chain flexibility, we define a cost structure which captures two different operational cost factors: inventory holding costs and lost sales costs. Several insights are evident from the numerical experiments. We also examine the performance of two other possible channel strategies: retail-only and direct-only strategies. Simulation outcomes indicate that the dual-channel strategy outperforms the other two channel strategies in most cases, and the cost reductions realized by the flexibility of the dual-channel system could be very significant

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

Inventory models with lateral transshipments : a review

Lateral transshipments within an inventory system are stock movements between locations of the same echelon. These transshipments can be conducted periodically at predetermined points in time to proactively redistribute stock, or they can be used reactively as a method of meeting demand which cannot be satised from stock on hand. The elements of an inventory system considered, e.g. size, cost structures and service level denition, all in uence the best method of transshipping. Models of many dierent systems have been considered. This paper provides a literature review which categorizes the research to date on lateral transshipments, so that these dierences can be understood and gaps within the literature can be identied