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A periodic review replenishment model with a refined delivery scenario

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  • Chiang, Chi

Abstract

This paper considers a single-item replenishment problem where every n periods the buyer plans for the quantity delivered for each upcoming period. Assuming that demand not filled immediately is backlogged, we suggest that the quantity delivered in the immediately upcoming period be of any size and the quantity delivered in each of the subsequent (n-1) periods be equal to or smaller than a fixed quantity Q. We derive the average cost per n periods and compute the optimal order-up-to level for the proposed replenishment policy. Next, assuming a fixed cost for reviewing inventory and planning deliveries, we obtain the optimal n by minimizing the expected cost per period. Finally, the optimal Q can also be determined. The proposed periodic review policy is easy to implement.

Suggested Citation

  • Chiang, Chi, 2009. "A periodic review replenishment model with a refined delivery scenario," International Journal of Production Economics, Elsevier, vol. 118(1), pages 253-259, March.
    • Handle: RePEc:eee:proeco:v:118:y:2009:i:1:p:253-259
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    References listed on IDEAS

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    1. Janssen, Fred & de Kok, Ton, 1999. "A two-supplier inventory model," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 395-403, March.
    2. Chiang, Chi, 2001. "Order splitting under periodic review inventory systems," International Journal of Production Economics, Elsevier, vol. 70(1), pages 67-76, March.
    3. James Flynn & Stanley Garstka, 1997. "The Optimal Review Period in a Dynamic Inventory Model," Operations Research, INFORMS, vol. 45(5), pages 736-750, October.
    4. Chiang, Chi, 2007. "Optimal control policy for a standing order inventory system," European Journal of Operational Research, Elsevier, vol. 182(2), pages 695-703, October.
    5. James Flynn & Stanley Garstka, 1990. "A Dynamic Inventory Model with Periodic Auditing," Operations Research, INFORMS, vol. 38(6), pages 1089-1103, December.
    6. Matthew Rosenshine & Duncan Obee, 1976. "Analysis of a Standing Order Inventory System with Emergency Orders," Operations Research, INFORMS, vol. 24(6), pages 1143-1155, December.
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    Cited by:

    1. Dreyfuss, Michael & Giat, Yahel, 2019. "Allocating spares to maximize the window fill rate in a periodic review inventory system," International Journal of Production Economics, Elsevier, vol. 214(C), pages 151-162.
    2. Hedenstierna, Carl Philip T. & Disney, Stephen M., 2016. "Inventory performance under staggered deliveries and autocorrelated demand," European Journal of Operational Research, Elsevier, vol. 249(3), pages 1082-1091.
    3. Hedenstierna, Carl Philip T. & Disney, Stephen M., 2018. "Avoiding the capacity cost trap: Three means of smoothing under cyclical production planning," International Journal of Production Economics, Elsevier, vol. 201(C), pages 149-162.

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