IDEAS home Printed from https://ideas.repec.org/a/taf/uiiexx/v55y2023i3p259-270.html
   My bibliography  Save this article

A serial inventory system with lead-time-dependent backordering: A reduced-state approximation

Author

Listed:
  • Emre Berk
  • Ayhan Özgür Toy

Abstract

We study a serial inventory system where the external customers may have a maximum time that they would be willing to wait for delivery in cases of stock-out and the demand would be lost if the remaining delivery lead time of the next available item is longer. This lead-time-dependent backordering behavior subsumes the models of partial backordering regardless of the wait that a customer would experience. In the inventory literature, this behavior has only been analyzed in single-location settings. We study this behavior in a multi-stage setting. We consider continuous review (S−1,S) policies at all stages facing external Poisson demands. Using the method of supplementary variables, we define the stochastic process representing the inventory system and obtain the expressions for the operating characteristics of the inventory system. Based on the solution structures for the special cases, we propose an approximate solution which rests on replacing the state-dependent purchasing decision of the customer with an averaged-out purchase probability computed using only the age of the oldest item. An extensive numerical study indicates that the proposed approximation performs very well. Our numerical study provides additional insights about the sensitivity and allocation of stock levels across stages.

Suggested Citation

  • Emre Berk & Ayhan Özgür Toy, 2023. "A serial inventory system with lead-time-dependent backordering: A reduced-state approximation," IISE Transactions, Taylor & Francis Journals, vol. 55(3), pages 259-270, March.
  • Handle: RePEc:taf:uiiexx:v:55:y:2023:i:3:p:259-270
    DOI: 10.1080/24725854.2022.2057625
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/24725854.2022.2057625
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/24725854.2022.2057625?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Straubert, Christian, 2024. "A continuous approximation location-inventory model with exact inventory costs and nonlinear delivery lead time penalties," International Journal of Production Economics, Elsevier, vol. 268(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:uiiexx:v:55:y:2023:i:3:p:259-270. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/uiie .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.