Determining safety stock in the presence of stochastic lead time and demand
Management Science
Simulation Modeling and Analysis
Simulation Modeling and Analysis
An evolutionary algorithm for order splitting with multiple transport alternatives
Expert Systems with Applications: An International Journal
Linear-quadratic optimal control strategy for periodic-review inventory systems
Automatica (Journal of IFAC)
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A new approach determines the optimal inbound-resupply strategy when a supplier ships goods to a receiver. The strategy refers to the particular combination of sourcing alternatives that minimizes the receiver's total product costs, comprising the product price and the total logistics costs (that is, order, transportation, and inventory costs). The new approach differs from traditional order-splitting approaches by requiring that order quantities be an integer combination of the different sourcing alternatives' capacities and allowing the demand rate and lead times to be distributed according to any distribution function. An evolutionary metaheuristic uses discrete-event simulation to calculate safety stock levels corresponding to a predetermined service level. This avoids rigid assumptions on the demand- and lead-time-distributions to better determine the reorder point for real-life inbound-resupply strategies.This article is part of a special issue on advanced heuristics in transportation and logistics.