Lower bounds for multi-echelon stochastic inventory systems
Management Science
Production quotas as bounds on interplant JIT contracts
Management Science
Value of Information in Capacitated Supply Chains
Management Science
Dynamic Programming and Optimal Control, Two Volume Set
Dynamic Programming and Optimal Control, Two Volume Set
Quantitative Models for Supply Chain Management
Quantitative Models for Supply Chain Management
Inventory Cost Rate Functions with Nonlinear Shortage Costs
Operations Research
A Periodic Review Inventory System with Emergency Replenishments
Management Science
The Value of Information Sharing in a Two-Level Supply Chain
Management Science
Continuous Review Inventory Model with Dynamic Choice of Two Freight Modes with Fixed Costs
Manufacturing & Service Operations Management
Inventory Control with Generalized Expediting
Operations Research
Multiechelon Procurement and Distribution Policies for Traded Commodities
Management Science
A study on coordination of capacity allocation for different types of contractual retailers
Decision Support Systems
| Hi-index | 0.01 |
We consider a two-stage supply chain under centralized control. The downstream facility faces discrete stochastic demand and passes supply requests to the upstream facility. The upstream facilityalways meets the supply requests from downstream. If the upstream facility cannot meet the supply requests from inventory on hand, the shortage must be filled by expediting, which will incur per unit and setup costs. Such expediting may take the form of overtime production, which occurs at the end of the period and incurs relatively high production costs, or premium freight shipments, which involves building products at the beginning of the period they are needed and shipping them very quickly with relatively high shipping costs. We consider the case where one method of filling shortages is available and determine novel optimal inventory policies under centralized control. At both stages, threshold policies that depend only on the current inventory in the system are optimal; for the total inventory in the system, a base-stock policy is optimal. Numerical analysis provides insight into the optimal policies and allows us to compare the supply chains under centralized and decentralized control.