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An improved decision rule for emergency replenishments

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  • Axsäter, Sven

Abstract

This paper provides a new decision rule for emergency replenishments in an inventory system. The decision rule is a generalization of a previous decision rule suggested and evaluated in Axsäter (2003, 2007). An improvement step is added to this rule and this often means considerably better performance. The decisions are based on complete information about the system state. An advantage with our decision rule is its generality. It is possible to handle batch ordering, compound Poisson demand and emergency replenishments that take time. The decision rule has also a performance guarantee in the sense that emergency replenishments will always lead to lower expected costs. The rule can also be used in connection with lateral transshipments.

Suggested Citation

  • Axsäter, Sven, 2014. "An improved decision rule for emergency replenishments," International Journal of Production Economics, Elsevier, vol. 157(C), pages 313-317.
    • Handle: RePEc:eee:proeco:v:157:y:2014:i:c:p:313-317
    DOI: 10.1016/j.ijpe.2014.01.021
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    References listed on IDEAS

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    1. Yang, Guangyuan & Dekker, Rommert & Gabor, Adriana F. & Axsäter, Sven, 2013. "Service parts inventory control with lateral transshipment and pipeline stockflexibility," International Journal of Production Economics, Elsevier, vol. 142(2), pages 278-289.
    2. repec:dgr:rugsom:10006 is not listed on IDEAS
    3. Minner, Stefan, 2003. "Multiple-supplier inventory models in supply chain management: A review," International Journal of Production Economics, Elsevier, vol. 81(1), pages 265-279, January.
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    6. Paterson, Colin & Kiesmüller, Gudrun & Teunter, Ruud & Glazebrook, Kevin, 2011. "Inventory models with lateral transshipments: A review," European Journal of Operational Research, Elsevier, vol. 210(2), pages 125-136, April.
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    10. Huang, Shuo & Axsäter, Sven & Dou, Yifan & Chen, Jian, 2011. "A real-time decision rule for an inventory system with committed service time and emergency orders," European Journal of Operational Research, Elsevier, vol. 215(1), pages 70-79, November.
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