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An emergency supply policy for an inventory replenishment model with returns and partial backorders

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  • Nethanel Drezner

    (Ariel University)

  • Yonit Barron

    (Ariel University)

Abstract

This paper studies a continuous-review inventory replenishment model with a limited storage capacity S in an uncertain environment. We assume that the demands and returns follow independent Poisson processes. We further assume a ra1079 shelf life, a random lead time, and early loss. The storage is managed according to the base-stock (S, s) policy for $$s 0.$$ s 0 . In case of overstock, each returned item exceeding S is transferred to a foreign facility. If during the lead time a demand reaches zero stock, we consider two alternatives: either allow partial backordering up to $$L_{B}$$ L B items, beyond which the unsatisfied demand is lost, or call for an immediate and costly emergency supply up to level $$0

Suggested Citation

  • Nethanel Drezner & Yonit Barron, 2024. "An emergency supply policy for an inventory replenishment model with returns and partial backorders," Annals of Operations Research, Springer, vol. 343(1), pages 175-221, December.
    • Handle: RePEc:spr:annopr:v:343:y:2024:i:1:d:10.1007_s10479-024-06261-5
    DOI: 10.1007/s10479-024-06261-5
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