An efficient heuristic for inventory control when the customer is using a (s,S) policy

Authors:
Srinagesh Gavirneni
Affiliations:
Maxager Technology Inc., 8804 Rattlebush Cove, Austin, TX 78750, USA
Venue:
Operations Research Letters
Year:
2001

Citing 1
Cited 2

Value of Information in Capacitated Supply Chains

Management Science

Using Scheduled Ordering to Improve the Performance of Distribution Supply Chains

Management Science
Ergodic distribution for a fuzzy inventory model of type (s,S) with gamma distributed demands

Expert Systems with Applications: An International Journal

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Abstract

We consider a capacitated supply chain in which the supplier has the information of the (s,S) policy used by the retailer as well as the end-customer demand distribution. For the resulting inventory control problem at the supplier, optimal policies and structural properties were presented by Gavirneni et al. (Management Sci. 45(1) (1999) 16). They detailed an efficient solution procedure for the uncapacitated problem and resorted to computationally expensive infinitesimal perturbation analysis (IPA) for the capacitated situation. In this paper, we study a heuristic, based on the uncapacitated solution, for the capacitated situation. A detailed computational study showed that this heuristic is very efficient in that the costs increased by only 3.3% on the average. The heuristic was especially effective at higher capacities, lower holding costs, and extreme values of demand variance.