scholarly journals Optimization and Customer Utilities under Dynamic Lead Time Quotation in an M/M Type Base Stock System

2017 ◽  
Vol 2017 ◽  
pp. 1-10 ◽  
Author(s):  
Koichi Nakade ◽  
Hiroki Niwa
Keyword(s):  
Waiting Time ◽  
Lead Time ◽  
Inventory System ◽  
Base Stock ◽  
Base Stock Policy ◽  
Optimal Policies ◽  
Optimal Dynamic ◽  
System Information ◽  
Lead Time Quotation ◽  
Stock Policy

In a manufacturing and inventory system, information on production and order lead time helps consumers’ decision whether they receive finished products or not by considering their own impatience on waiting time. In Savaşaneril et al. (2010), the optimal dynamic lead time quotation policy in a one-stage production and inventory system with a base stock policy for maximizing the system’s profit and its properties are discussed. In this system, each arriving customer decides whether he/she enters the system based on the quoted lead time informed by the system. On the other hand, the customer’s utility may be small under the optimal quoted lead time policy because the actual lead time may be longer than the quoted lead time. We use a utility function with respect to benefit of receiving products and waiting time and propose several kinds of heuristic lead time quotation policies. These are compared with optimal policies with respect to both profits and customer’s utilities. Through numerical examples some kinds of heuristic policies have better expected utilities of customers than the optimal quoted lead time policy maximizing system’s profits.

Analysis of lead time correlation under a base-stock policy

2019 ◽  
Vol 276 (2) ◽  
pp. 519-535 ◽  
Author(s):  
Tim Hellemans ◽  
Robert N. Boute ◽  
Benny Van Houdt
Keyword(s):  
Lead Time ◽  
Time Correlation ◽  
Base Stock ◽  
Base Stock Policy ◽  
Stock Policy

scholarly journals Dynamic Pricing and Production Control of an Inventory System with Remanufacturing

2015 ◽  
Vol 2015 ◽  
pp. 1-8 ◽  
Author(s):  
Chunyan Gao ◽  
Yao Wang ◽  
Liang Xu ◽  
Yi Liao
Keyword(s):  
Dynamic Pricing ◽  
Production Control ◽  
Inventory System ◽  
Base Stock ◽  
Inventory Level ◽  
Optimal Pricing ◽  
Customer Demand ◽  
Threshold Policy ◽  
Base Stock Policy ◽  
Stock Policy

We consider optimal pricing and manufacturing control of a continuous-review inventory system with remanufacturing. Customer demand and product return follow independent Poisson processes. Customer demand is filled by serviceable product, which can be either manufactured or remanufactured from the returned product. The lead times for both manufacturing and remanufacturing are exponentially distributed. The objective is to maximize the expected total discounted profit over an infinite planning horizon. We characterize the structural properties of the optimal policy through the optimality equation. Specifically, the optimal manufacturing policy is a base-stock policy with the base-stock level nonincreasing in the return inventory level. The optimal pricing policy is also a threshold policy, where the threshold level is nonincreasing in the return inventory level.

scholarly journals A Two-Echelon Inventory System with a Minimum Order Quantity Requirement

2019 ◽  
Vol 11 (18) ◽  
pp. 5059
Author(s):  
Huaxiao Shen ◽  
Tian Tian ◽  
Han Zhu
Keyword(s):  
Inventory System ◽  
Base Stock ◽  
Order Quantity ◽  
Minimum Order ◽  
System Cost ◽  
Base Stock Policy ◽  
Long Run ◽  
Minimum Order Quantity ◽  
Average System ◽  
Stock Policy

In this paper, we study a two-echelon inventory system with one warehouse and multiple retailers, under the setting of periodic review and infinite horizon. In each period, retailers replenish their stocks from the warehouse, and the warehouse in turn replenishes from an external supplier. Particularly, as stipulated by the supplier, there is a minimum order quantity (MOQ) requirement for the warehouse. That is, the warehouse must order either none or at least as much as the MOQ. To investigate this system analytically, we assume retailers adopt the base-stock policy, and we design for the warehouse a new heuristic ordering policy, called refined base-stock policy, which conforms to the MOQ requirement. Moreover, in the case of shortages, we assume the warehouse adopts a virtual allocation policy, and therefore the orders for individual units are filled in the same order as the original demands at the retailers. To evaluate the long-run average system cost exactly, we present a position-based cost-accounting scheme, in which the cost associated with each unit is assigned to its first position at the warehouse. We also derive lower and upper bounds of the inventory parameters, facilitating the search for the optimal policy that minimizes the long-run average system cost.

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