Production and allocation policies in a two-class inventory system with time and quantity dependent waiting costs

Authors:
Wooseung Jang
Affiliations:
Department of Industrial and Manufacturing Systems Engineering, University of Missouri-Columbia, Columbia, MO
Venue:
Computers and Operations Research
Year:
2006

Citing 3
Cited 3

Service constrained (s, S) inventory systems with priority demand classes and lost sales

Management Science
Optimal Stock Allocation for a Capacitated Supply System

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Managing individual customer service constraints under stochastic demand

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A bi-criteria model for the inventory aggregation problem under risk pooling

Computers and Industrial Engineering
Coordinating production and shipment decisions in a two-stage supply chain with time-sensitive demand

Mathematical and Computer Modelling: An International Journal
A two-demand-class inventory system with lost-sales and backorders

Operations Research Letters

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Abstract

This paper presents an integrated production and inventory allocation model in a two-echelon supply chain system. The higher echelon is a manufacturer, who produces a single commodity. The lower echelon consists of two types of major commodity distributors who might face stochastic or deterministic demands from multiple retailers. Our analytical model provides optimal decision policies that minimize total production and customer waiting costs from the manufacturer's perspective when there are time and quantity dependent customer waiting costs. We identify the value of the integrated policy and compare it with typical approximations such as aggregating the multiple demands or applying the single demand multiple times.