Performance Evaluation of Stochastic Multi-Echelon Inventory Systems: A Survey

Globalization, product proliferation, and fast product innovation have significantly increased the complexities of supply chains in many industries. One of the most important advancements of supply chain management in recent years is the development of models and methodologies for controlling inventory in general supply networks under uncertainty and their widefspread applications to industry. These developments are based on three generic methods: the queueing-inventory method, the lead-time demand method and the flow-unit method. In this paper, we compare and contrast these methods by discussing their strengths and weaknesses, their differences and connections, and showing how to apply them systematically to characterize and evaluate various supply networks with different supply processes, inventory policies, and demand processes. Our objective is to forge links among research strands on different methods and various network topologies so as to develop unified methodologies.Masdar Institute of Science and TechnologyNational Science Foundation (U.S.) (NSF Contract CMMI-0758069)National Science Foundation (U.S.) (Career Award CMMI-0747779)Bayer Business ServicesSAP A

Healthcare queueing models.

Healthcare systems differ intrinsically from manufacturing systems. As such, they require a distinct modeling approach. In this article, we show how to construct a queueing model of a general class of healthcare systems. We develop new expressions to assess the impact of service outages and use the resulting model to approximate patient flow times and to evaluate a number of practical applications. We illustrate the devastating impact of service interruptions on patient flow times and show the potential gains obtained by pooling hospital resources. In addition, we present an optimization model to determine the optimal number of patients to be treated during a service session.Operations research; Health care evaluation mechanisms; Organizational efficiency; Management decision support systems; Time management; Queueing theory;

Clips: a capacity and lead time integrated procedure for scheduling.

We propose a general procedure to address real life job shop scheduling problems. The shop typically produces a variety of products, each with its own arrival stream, its own route through the shop and a given customer due date. The procedure first determines the manufacturing lot sizes for each product. The objective is to minimize the expected lead time and therefore we model the production environment as a queueing network. Given these lead times, release dates are set dynamically. This in turn creates a time window for every manufacturing order in which the various operations have to be sequenced. The sequencing logic is based on a Extended Shifting Bottleneck Procedure. These three major decisions are next incorporated into a four phase hierarchical operational implementation scheme. A small numerical example is used to illustrate the methodology. The final objective however is to develop a procedure that is useful for large, real life shops. We therefore report on a real life application.Model; Models; Applications; Product; Scheduling;

Analysis of an assemble-to-order system with different review periods

We consider a single item assembled from two components. One of the components has a long leadtime, high holding cost and short review period as compared to the other one. We assume that net stocks are reviewed periodically, customer demand is stochastic and unsatisfied demand is back ordered. We analyze the system under two different policies and show how to determine the policy parameters minimizing average holding and backorder costs. First, we consider a pure base stock policy, where orders for each component are placed such that the inventory position is raised up to a given base stock level. In contrast to this, only the orders for one component follow this logic while the other orders are synchronized in case of a balanced base stock policy. Through mathematical analysis, we come up with the exact long-run average cost function and we show the optimality conditions for both policies. In a numerical study the policies are compared and the results suggest that the balanced base stock policy works better than the pure base stock policy under low service levels and when there is a big difference in the holding costs of the components

A review of the open queueing network models of manufacturing systems

"December 1990."Includes bibliographical references (p. 52-58).Research partially supported by the "Leaders for Manufacturing Program". Research partially supported by the UCLA Senate Committee on Grants. 99by Gabriel R. Bitran, Sriram Dasu

Comparing Markov Chains: Aggregation and Precedence Relations Applied to Sets of States, with Applications to Assemble-to-Order Systems

International audienceSolving Markov chains is, in general, difficult if the state space of the chain is very large (or infinite) and lacking a simple repeating structure. One alternative to solving such chains is to construct models that are simple to analyze and provide bounds for a reward function of interest. We present a new bounding method for Markov chains inspired by Markov reward theory: Our method constructs bounds by redirecting selected sets of transitions, facilitating an intuitive interpretation of the modifications of the original system. We show that our method is compatible with strong aggregation of Markov chains; thus we can obtain bounds for an initial chain by analyzing a much smaller chain. We illustrate our method by using it to prove monotonicity results and bounds for assemble-to-order systems

A Continuous Review inventory Control Model within Batch Arrival Queuing Framework: A Parameter-Tuned Imperialist Competitive Algorithm

In this paper, a multi-product continues review inventory control problem within batch arrival queuing approach (MQr/M/1) is modeled to find the optimal quantities of maximum inventory. The objective function is to minimize summation of ordering, holding and shortage costs under warehouse space, service level, and expected lost-sales shortage cost constraints from retailer and warehouse viewpoints. Since the proposed model is Np-Hard, an efficient imperialist competitive algorithm (ICA) is proposed to solve the model. To justify proposed ICA, a simulated annealing algorithm has been utilized. In order to determine the best value of algorithms parameters that result in a better solution, a fine-tuning procedure is executed. Finally, the performance of the proposed ICA is analyzed using some numerical illustrations

The value of coordination in manufacturer-customer relationships

This paper studies the relationship between a manufacturer and his customer. In the traditional setting, the customer manages her own inventory and places replenishment orders that are made-to-order by the manufacturer. Recently, supply chain initiatives such as Vendor Managed Inventory (VMI) have changed the traditional customer-manufacturer relationship. In a VMI relationship, the manufacturer becomes responsible for the management of his customer¿s inventory. Often, costs associated with inventory keeping are transferred from the customer to the manufacturer. Because of this cost transfer, VMI typically is more expensive for the manufacturer. However, being responsible for the inventory management, the manufacturer can coordinate the production and inventory control decisions. It is the goal of this paper to show how the manufacturer can realize this coordination. Moreover, we present a framework to categorize several VMI relationship types. We give insights on the structure of the problem as well as some insights on opportunities for cost savings. The insights are illustrated by numerical examples, which show that the value of coordination can be subtantial in many cases