A Decomposition Approach for a Class of Capacitated Serial Systems

Authors:
Ganesh Janakiraman;John A. Muckstadt
Affiliations:
IOMS-OM Group, Stern School of Business, New York University, New York, New York 10012;School of Operations Research and Industrial Engineering, Cornell University, Ithaca, New York 14853
Venue:
Operations Research
Year:
2009

Citing 4
Cited 5

Simple solution procedures for a class of two-echelon inventory problems

Operations Research
Exact and approximate evaluation of batch-ordering policies for two-level inventory systems

Operations Research
Inventory Control in Directed Networks: A Note on Linear Costs

Operations Research
Optimal Policies for a Capacitated Two-Echelon Inventory System

Operations Research

On the Optimal Policy Structure in Serial Inventory Systems with Lost Sales

Operations Research
Technical Note---Capacitated Serial Inventory Systems: Sample Path and Stability Properties Under Base-Stock Policies

Operations Research
Myopic Inventory Policies Using Individual Customer Arrival Information

Manufacturing & Service Operations Management
Managing a Noncooperative Supply Chain with Limited Capacity

Operations Research
A Multiechelon Inventory Problem with Secondary Market Sales

Management Science

Quantified Score

Hi-index	0.00

Visualization

Abstract

We study a class of two-echelon serial systems with identical ordering/production capacities or limits for both echelons. Demands are assumed to be integer valued. For the case where the lead time to the upstream echelon is one period, the optimality of state-dependent modified echelon base-stock policies is proved using a decomposition approach. For the case where the upstream lead time is two periods, we introduce a new class of policies called “two-tier base-stock policies,” and prove their optimality. Some insight about the inventory control problem in N echelon serial systems with identical capacities at all stages and arbitrary lead times everywhere is also provided. We argue that a generalization of two-tier base-stock policies, which we call “multitier base-stock policies,” are optimal for these systems; we also provide a bound on the number of parameters required to specify the optimal policy.