Pub Date : 2015-12-31DOI: 10.1504/ijir.2015.073947
C. Larsen
In this note, a new efficient algorithm is proposed to find an optimal (s, S) replenishment policy for inventory systems with continuous reviews and where the demand follows a stuttering Poisson process (the compound element is geometrically distributed). We also derive three upper bounds for the relative increase in cost if one uses the best (R, nQ) policy instead of the optimal (s, S) policy. One of these upper bounds (the most loose of those) can be expressed as the fraction of the variance-to-mean ratio of the geometric distribution and the economic order quantity. We explore numerically when these upper bounds are tight.
{"title":"A note on optimal (s, S) and (R, nQ) policies under a stuttering Poisson demand process","authors":"C. Larsen","doi":"10.1504/ijir.2015.073947","DOIUrl":"https://doi.org/10.1504/ijir.2015.073947","url":null,"abstract":"In this note, a new efficient algorithm is proposed to find an optimal (s, S) replenishment policy for inventory systems with continuous reviews and where the demand follows a stuttering Poisson process (the compound element is geometrically distributed). We also derive three upper bounds for the relative increase in cost if one uses the best (R, nQ) policy instead of the optimal (s, S) policy. One of these upper bounds (the most loose of those) can be expressed as the fraction of the variance-to-mean ratio of the geometric distribution and the economic order quantity. We explore numerically when these upper bounds are tight.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"88 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132752053","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2015-12-31DOI: 10.1504/ijir.2015.073934
Hamza Adeinat, J. A. Ventura
This article considers a supply chain inventory problem for a particular type of raw material with multiple suppliers, where each supplier offers all-unit quantity discounts as a motivation mechanism to increase the placed order quantities, and hence reduce the average the replenishment cost. In addition, multiple orders to the selected suppliers with different frequencies are allowed during a repeating order cycle. In this research, we propose a mixed integer nonlinear programming (MINLP) model to find the optimal number of orders and corresponding order quantities for the selected suppliers that minimise the total replenishment and inventory cost per time unit under suppliers' capacity and quality constraints. A numerical example is provided to illustrate the proposed MINLP model. We also compare the results of our model with those from other researchers, where at most one order can be allocated to each supplier per repeating order cycle.
{"title":"Quantity discount decisions considering multiple suppliers with capacity and quality restrictions","authors":"Hamza Adeinat, J. A. Ventura","doi":"10.1504/ijir.2015.073934","DOIUrl":"https://doi.org/10.1504/ijir.2015.073934","url":null,"abstract":"This article considers a supply chain inventory problem for a particular type of raw material with multiple suppliers, where each supplier offers all-unit quantity discounts as a motivation mechanism to increase the placed order quantities, and hence reduce the average the replenishment cost. In addition, multiple orders to the selected suppliers with different frequencies are allowed during a repeating order cycle. In this research, we propose a mixed integer nonlinear programming (MINLP) model to find the optimal number of orders and corresponding order quantities for the selected suppliers that minimise the total replenishment and inventory cost per time unit under suppliers' capacity and quality constraints. A numerical example is provided to illustrate the proposed MINLP model. We also compare the results of our model with those from other researchers, where at most one order can be allocated to each supplier per repeating order cycle.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130051649","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2015-05-13DOI: 10.1504/ijir.2014.069188
P. Wanke
This paper assesses the impact of tail dependence on the consolidation effect. Based on different R packages, it was not only possible to use copulas for modelling the dependence structure between decentralised demands, but also to randomly generate and optimise different scenarios for various product characteristics, thus finding the best pooling policy: inventory centralisation, regular transshipment, or independent systems. Results suggest a different pattern for the decision-making rationale involving correlation and inventory holding costs. While independent systems and regular transshipments seem to compensate for strong upper tail dependence structures, centralisation seems to compensate for strong lower tail ones.
{"title":"Consolidation effects: assessing the impact of tail dependence on inventory pooling using copulas","authors":"P. Wanke","doi":"10.1504/ijir.2014.069188","DOIUrl":"https://doi.org/10.1504/ijir.2014.069188","url":null,"abstract":"This paper assesses the impact of tail dependence on the consolidation effect. Based on different R packages, it was not only possible to use copulas for modelling the dependence structure between decentralised demands, but also to randomly generate and optimise different scenarios for various product characteristics, thus finding the best pooling policy: inventory centralisation, regular transshipment, or independent systems. Results suggest a different pattern for the decision-making rationale involving correlation and inventory holding costs. While independent systems and regular transshipments seem to compensate for strong upper tail dependence structures, centralisation seems to compensate for strong lower tail ones.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129685897","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2015-05-13DOI: 10.1504/ijir.2014.069191
M. Rajkumar, B. Sivakumar, G. Arivarignan
This article considers a multi-server inventory system at a service facility. The customers arrive according to a Poisson process. The demanded items are delivered to the customers after performing some service on the item and this service time is distributed as negative exponential. The ordering policy is (s; S) policy, that is, once the inventory level drops to a prefixed level, say s(≥ 0); an order for Q(= S − s) items is placed. The joint probability distribution of the number of busy servers, number of customers in the queue and the inventory level is obtained in the steady state case. The Laplace-Stieltjes transforms of the first passage time and of the waiting time of a tagged customer are derived. Various system performance are derived and the total expected cost rate is computed under a suitable cost structure. The results are illustrated numerically.
{"title":"An infinite waiting hall at a multi-server inventory system","authors":"M. Rajkumar, B. Sivakumar, G. Arivarignan","doi":"10.1504/ijir.2014.069191","DOIUrl":"https://doi.org/10.1504/ijir.2014.069191","url":null,"abstract":"This article considers a multi-server inventory system at a service facility. The customers arrive according to a Poisson process. The demanded items are delivered to the customers after performing some service on the item and this service time is distributed as negative exponential. The ordering policy is (s; S) policy, that is, once the inventory level drops to a prefixed level, say s(≥ 0); an order for Q(= S − s) items is placed. The joint probability distribution of the number of busy servers, number of customers in the queue and the inventory level is obtained in the steady state case. The Laplace-Stieltjes transforms of the first passage time and of the waiting time of a tagged customer are derived. Various system performance are derived and the total expected cost rate is computed under a suitable cost structure. The results are illustrated numerically.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132190911","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2015-05-13DOI: 10.1504/ijir.2014.069187
Richard K. Lai, Z. Ren, D. Robb
We ask whether, in China, geographic location has explanatory power for firms' inventory turn, and why. To do this, we undertake a variance component analysis (VCA) of firm-level inventory turn, using a panel dataset of 1,531 unique Chinese firms spanning 1999-2008. Our identification arises from the fact that many locations have multiple firms and some firms have multiple locations. We find that city and province effects explain 18.4% and 6.3% of the variation in inventory turn respectively, constituting the most important effects after firm effects (50.0%) and ahead of year and industry effects. To understand why, we use seemingly unrelated regressions (SUR) to identify six city-specific effects that explain inventory turn. We then check how these effects impact inventory turn, by estimating how the effects-turn relationship is mediated by known drivers of inventory turn such as gross margin and lead time. For example, we find that distance from Beijing is associated with higher inventory turn via lower gross margins.
{"title":"Geographical influences on Chinese inventory: an exploratory study","authors":"Richard K. Lai, Z. Ren, D. Robb","doi":"10.1504/ijir.2014.069187","DOIUrl":"https://doi.org/10.1504/ijir.2014.069187","url":null,"abstract":"We ask whether, in China, geographic location has explanatory power for firms' inventory turn, and why. To do this, we undertake a variance component analysis (VCA) of firm-level inventory turn, using a panel dataset of 1,531 unique Chinese firms spanning 1999-2008. Our identification arises from the fact that many locations have multiple firms and some firms have multiple locations. We find that city and province effects explain 18.4% and 6.3% of the variation in inventory turn respectively, constituting the most important effects after firm effects (50.0%) and ahead of year and industry effects. To understand why, we use seemingly unrelated regressions (SUR) to identify six city-specific effects that explain inventory turn. We then check how these effects impact inventory turn, by estimating how the effects-turn relationship is mediated by known drivers of inventory turn such as gross margin and lead time. For example, we find that distance from Beijing is associated with higher inventory turn via lower gross margins.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114072138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2013-12-18DOI: 10.1504/IJIR.2013.058343
Genco Fas, T. Bilgiç
We consider the equilibrium strategies for substitutable product inventory control systems with a random demand in a two-period stationary environment between two retailers. This stationary scenario can be viewed as a dynamic game in a duopoly setting. We formulate the single period game and extend it to the two-period dynamic game. We investigate the existence and uniqueness of the feedback Nash equilibrium with two periods to go. We also suggest a threshold inventory level with two periods to go below which the usual substitution effect on the equilibrium may not be observed. We prove the uniqueness of the equilibrium by imposing more structure on the density function of the demand.
{"title":"A two-period dynamic game for a substitutable product inventory control problem","authors":"Genco Fas, T. Bilgiç","doi":"10.1504/IJIR.2013.058343","DOIUrl":"https://doi.org/10.1504/IJIR.2013.058343","url":null,"abstract":"We consider the equilibrium strategies for substitutable product inventory control systems with a random demand in a two-period stationary environment between two retailers. This stationary scenario can be viewed as a dynamic game in a duopoly setting. We formulate the single period game and extend it to the two-period dynamic game. We investigate the existence and uniqueness of the feedback Nash equilibrium with two periods to go. We also suggest a threshold inventory level with two periods to go below which the usual substitution effect on the equilibrium may not be observed. We prove the uniqueness of the equilibrium by imposing more structure on the density function of the demand.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123120600","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2013-12-18DOI: 10.1504/IJIR.2013.058340
Arcan Nalca, Haldun Süral, Y. Gerchak
In this study we consider a simple two level supply chain consisting of an assembler and a group of suppliers producing a single product for a constant external demand rate. Suppliers manufacture the product’s components at unequal rates. When all components are available, they are assembled to a finished product. The determination of the lot sizes of the product and its components depends on whether one seeks system optimality, corresponding to a coordinated system, or whether the assembly firm dictates to the suppliers the lot sizes it prefers. We develop a model to compare the effects of coordinated and decentralised decisions on the total cost of the system.
{"title":"Economic manufacturing quantities of components in supply chains","authors":"Arcan Nalca, Haldun Süral, Y. Gerchak","doi":"10.1504/IJIR.2013.058340","DOIUrl":"https://doi.org/10.1504/IJIR.2013.058340","url":null,"abstract":"In this study we consider a simple two level supply chain consisting of an assembler and a group of suppliers producing a single product for a constant external demand rate. Suppliers manufacture the product’s components at unequal rates. When all components are available, they are assembled to a finished product. The determination of the lot sizes of the product and its components depends on whether one seeks system optimality, corresponding to a coordinated system, or whether the assembly firm dictates to the suppliers the lot sizes it prefers. We develop a model to compare the effects of coordinated and decentralised decisions on the total cost of the system.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127167757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2013-12-18DOI: 10.1504/IJIR.2013.058341
T. Choi
This paper studies a single-manufacturer single-retailer multi-period fashion supply chain which sells a category of short-life highly fashionable products. The retailer is risk averse and the supply chain is led by the upstream manufacturer. This paper studies two commonly seen contracts in the fashion industry, namely the pure wholesale pricing contract (PWPC) and the markdown money contract (MDMC). The efficient region for the risk averse retailer’s optimal ordering quantity for each contract is found and this region will: 1) become smaller if the wholesale price increases (under both PWPC and MDMC); 2) get larger when the markdown money increases (under MDMC). We introduce the concept of ‘risk averse quantity reduction level’ (RAQRL). Our analytical findings further indicate that: 1) under scenario one in which the manufacturer’s goal is to maximise the supply chain’s expected profit, the appropriately set MDMC can coordinate the supply chain whereas PWPC cannot; 2) under scenario two in which the manufacturer’s goal is to maximise the supply chain’s expected profit while ensuring the variance of profit is within a limit, both PWPC and MDMC can coordinate the supply chain.
{"title":"Game theoretic analysis of a multi-period fashion supply chain with a risk averse retailer","authors":"T. Choi","doi":"10.1504/IJIR.2013.058341","DOIUrl":"https://doi.org/10.1504/IJIR.2013.058341","url":null,"abstract":"This paper studies a single-manufacturer single-retailer multi-period fashion supply chain which sells a category of short-life highly fashionable products. The retailer is risk averse and the supply chain is led by the upstream manufacturer. This paper studies two commonly seen contracts in the fashion industry, namely the pure wholesale pricing contract (PWPC) and the markdown money contract (MDMC). The efficient region for the risk averse retailer’s optimal ordering quantity for each contract is found and this region will: 1) become smaller if the wholesale price increases (under both PWPC and MDMC); 2) get larger when the markdown money increases (under MDMC). We introduce the concept of ‘risk averse quantity reduction level’ (RAQRL). Our analytical findings further indicate that: 1) under scenario one in which the manufacturer’s goal is to maximise the supply chain’s expected profit, the appropriately set MDMC can coordinate the supply chain whereas PWPC cannot; 2) under scenario two in which the manufacturer’s goal is to maximise the supply chain’s expected profit while ensuring the variance of profit is within a limit, both PWPC and MDMC can coordinate the supply chain.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"2020 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117289745","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2013-12-18DOI: 10.1504/IJIR.2013.058342
Jingpu Song, Liping Liang
With the existence of uncertain demands and competitors, a seller’s inventory control policy for perishable products can significantly affect the seller and consumers due to its effects on the seller’s revenue, transferred demand, and product availability. In this paper, we consider two sellers selling substitutable products in a market where the ordering requests from different fare classes arrive concurrently. We formulate this problem as a two-player two-fare-class dynamic inventory control game, and examine the optimal accept/reject policies in both non-cooperative and cooperative situations. Our results shed light on three issues: the impact of transferred demand on a seller’s revenue, the structure of the optimal inventory control policy, and the importance of cooperation for sellers in the presence of transferred demand.
{"title":"Dynamic inventory control game for perishable products with concurrent probabilistic demands from two fare classes","authors":"Jingpu Song, Liping Liang","doi":"10.1504/IJIR.2013.058342","DOIUrl":"https://doi.org/10.1504/IJIR.2013.058342","url":null,"abstract":"With the existence of uncertain demands and competitors, a seller’s inventory control policy for perishable products can significantly affect the seller and consumers due to its effects on the seller’s revenue, transferred demand, and product availability. In this paper, we consider two sellers selling substitutable products in a market where the ordering requests from different fare classes arrive concurrently. We formulate this problem as a two-player two-fare-class dynamic inventory control game, and examine the optimal accept/reject policies in both non-cooperative and cooperative situations. Our results shed light on three issues: the impact of transferred demand on a seller’s revenue, the structure of the optimal inventory control policy, and the importance of cooperation for sellers in the presence of transferred demand.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124955386","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2013-12-18DOI: 10.1504/IJIR.2013.058338
Xu Zhang, P. Zeephongsekul
In this paper, we look at several game theoretical models of a supplier-retailer supply chain involving a strategic consumer. The interaction between the players will be investigated using a leader-follower type game known as a Stackelberg game. Two scenarios are considered: 1) no coalition is formed among the players and they act non-cooperatively against each others; 2) a selection of two players form a coalition against the third player. Under the first scenario, we let each player takes turn as leader, and in the second scenario, the coalition takes the leadership position in the game. The effects due to leadership and coalition formation on each player’s strategy and profit, especially consumer’s welfare, will be investigated and numerical examples provided.
{"title":"Game theoretical models of two-level supply chain with a strategic consumer","authors":"Xu Zhang, P. Zeephongsekul","doi":"10.1504/IJIR.2013.058338","DOIUrl":"https://doi.org/10.1504/IJIR.2013.058338","url":null,"abstract":"In this paper, we look at several game theoretical models of a supplier-retailer supply chain involving a strategic consumer. The interaction between the players will be investigated using a leader-follower type game known as a Stackelberg game. Two scenarios are considered: 1) no coalition is formed among the players and they act non-cooperatively against each others; 2) a selection of two players form a coalition against the third player. Under the first scenario, we let each player takes turn as leader, and in the second scenario, the coalition takes the leadership position in the game. The effects due to leadership and coalition formation on each player’s strategy and profit, especially consumer’s welfare, will be investigated and numerical examples provided.","PeriodicalId":113309,"journal":{"name":"International Journal of Inventory Research","volume":"79 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114809904","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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