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Periodic-Review Inventory Model with Three Consecutive Delivery Modes and Forecast Updates

Author

Listed:
  • Q. Feng

    (University of Texas at Dallas)

  • G. Gallego

    (Columbia University)

  • S. P. Sethi

    (University of Texas at Dallas)

  • H. Yan

    (University of Texas at Dallas)

  • H. Zhang

    (Academy of Mathematics and Systems Science, Academia Sinica)

Abstract

This paper is concerned with a periodic-review inventory system with three consecutive delivery modes (fast, medium, and slow) and demand forecast updates. At the beginning of each period, the inventory level and demand information are updated and decisions on how much to order using each of the three delivery modes are made. It is shown that there is a base-stock policy for fast and medium modes which is optimal. Furthermore, the optimal policy for the slow mode may not be a base-stock policy in general.

Suggested Citation

  • Q. Feng & G. Gallego & S. P. Sethi & H. Yan & H. Zhang, 2005. "Periodic-Review Inventory Model with Three Consecutive Delivery Modes and Forecast Updates," Journal of Optimization Theory and Applications, Springer, vol. 124(1), pages 137-155, January.
    • Handle: RePEc:spr:joptap:v:124:y:2005:i:1:d:10.1007_s10957-004-6469-6
    DOI: 10.1007/s10957-004-6469-6
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    Citations

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    Cited by:

    1. Sean X. Zhou & Zhijie Tao & Xiuli Chao, 2011. "Optimal Control of Inventory Systems with Multiple Types of Remanufacturable Products," Manufacturing & Service Operations Management, INFORMS, vol. 13(1), pages 20-34, March.
    2. Awi Federgruen & Zhe Liu & Lijian Lu, 2022. "Dual sourcing: Creating and utilizing flexible capacities with a second supply source," Production and Operations Management, Production and Operations Management Society, vol. 31(7), pages 2789-2805, July.
    3. Chaolin Yang & Diyuan Huang & Chenyang Xu, 2022. "Multi-index base-stock policy for inventory systems with multiple capacitated suppliers," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(1), pages 155-177, March.
    4. Erica L. Plambeck & Amy R. Ward, 2007. "Note: A Separation Principle for a Class of Assemble-to-Order Systems with Expediting," Operations Research, INFORMS, vol. 55(3), pages 603-609, June.
    5. Cai, Wenbo & Abdel-Malek, Layek & Hoseini, Babak & Rajaei Dehkordi, Sharareh, 2015. "Impact of flexible contracts on the performance of both retailer and supplier," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 429-444.
    6. A. Bensoussan & M. Çakanyildirim & S. P. Sethi, 2006. "Optimality of Base-Stock and (s, S) Policies for Inventory Problems with Information Delays," Journal of Optimization Theory and Applications, Springer, vol. 130(2), pages 153-172, August.
    7. Choi, Tsan-Ming & Sethi, Suresh, 2010. "Innovative quick response programs: A review," International Journal of Production Economics, Elsevier, vol. 127(1), pages 1-12, September.
    8. Michelle Blom & Slava Shekh & Don Gossink & Tim Miller & Adrian R Pearce, 2020. "Inventory routing for defense: Moving supplies in adversarial and partially observable environments," The Journal of Defense Modeling and Simulation, , vol. 17(1), pages 55-81, January.
    9. Otero, Daniel F. & Escallón, Mariana & López, Cristina & Akhavan-Tabatabaei, Raha, 2019. "Optimal timing of airline promotions under dilution," European Journal of Operational Research, Elsevier, vol. 277(3), pages 981-995.
    10. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.
    11. Luo, Kai & Bollapragada, Ramesh & Kerbache, Laoucine, 2017. "Inventory allocation models for a two-stage, two-product, capacitated supplier and retailer problem with random demand," International Journal of Production Economics, Elsevier, vol. 187(C), pages 168-181.
    12. 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.
    13. Youyi Feng & Mozart B.C. Menezes, 2022. "Integrated production and renewable energy generation in the presence of hydrogen energy storage," Production and Operations Management, Production and Operations Management Society, vol. 31(5), pages 2222-2236, May.
    14. Xie, Chen & Wang, Liangquan & Yang, Chaolin, 2021. "Robust inventory management with multiple supply sources," European Journal of Operational Research, Elsevier, vol. 295(2), pages 463-474.
    15. Qi Feng & Suresh P. Sethi & Houmin Yan & Hanqin Zhang, 2006. "Are Base-Stock Policies Optimal in Inventory Problems with Multiple Delivery Modes?," Operations Research, INFORMS, vol. 54(4), pages 801-807, August.

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