IDEAS home Printed from https://ideas.repec.org/a/spr/operea/v20y2020i3d10.1007_s12351-018-0399-9.html
   My bibliography  Save this article

An adaptive joint replenishment policy for items with non-stationary demands

Author

Listed:
  • Young Hyeon Yang

    (Hanyang University)

  • Jong Soo Kim

    (Hanyang University)

Abstract

This paper concerns the joint replenishment problem for a single buyer who sells multiple types of items to end customers. The buyer periodically replenishes the item inventory to order-up-to levels to cover the end customers’ demands, which may be non-stationary. A joint replenishment policy characterized by a variable order-up-to level is proposed for buyers who wish to minimize the expected cost of operating the inventory system. According to the proposed policy, each period starts with calculation of the expected cost of two options, ordering and not ordering each item, based on a current inventory position and forecasted demand for the upcoming period. The proposed policy then uses an integer-programming model to generate a cost-minimizing decision for the joint replenishment. A computer experiment was performed to test the efficiency of the proposed policy. When compared with the most efficient policy currently available, our policy yielded considerable cost savings, especially for non-stationary demands.

Suggested Citation

  • Young Hyeon Yang & Jong Soo Kim, 2020. "An adaptive joint replenishment policy for items with non-stationary demands," Operational Research, Springer, vol. 20(3), pages 1665-1684, September.
    • Handle: RePEc:spr:operea:v:20:y:2020:i:3:d:10.1007_s12351-018-0399-9
    DOI: 10.1007/s12351-018-0399-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12351-018-0399-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12351-018-0399-9?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.

    References listed on IDEAS

    as
    1. S Viswanathan, 2002. "On optimal algorithms for the joint replenishment problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(11), pages 1286-1290, November.
    2. S G Johansen & P Melchiors, 2003. "Can-order policy for the periodic-review joint replenishment problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(3), pages 283-290, March.
    3. Nilsson, Andreas & Segerstedt, Anders & van der Sluis, Erik, 2007. "A new iterative heuristic to solve the joint replenishment problem using a spreadsheet technique," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 399-405, July.
    4. A. Federgruen & H. Groenevelt & H. C. Tijms, 1984. "Coordinated Replenishments in a Multi-Item Inventory System with Compound Poisson Demands," Management Science, INFORMS, vol. 30(3), pages 344-357, March.
    5. Davood Mohammaditabar & Seyed Hassan Ghodsypour, 2016. "A supplier-selection model with classification and joint replenishment of inventory items," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(8), pages 1745-1754, June.
    6. Edward A. Silver, 1976. "A Simple Method of Determining Order Quantities in Joint Replenishments Under Deterministic Demand," Management Science, INFORMS, vol. 22(12), pages 1351-1361, August.
    7. K. Ohno & T. Ishigaki, 2001. "A multi-item continuous review inventory system with compound Poisson demands," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 53(1), pages 147-165, April.
    8. Larsen, Christian, 2009. "The Q(s,S) control policy for the joint replenishment problem extended to the case of correlation among item-demands," International Journal of Production Economics, Elsevier, vol. 118(1), pages 292-297, March.
    9. Melchiors, Philip, 2002. "Calculating can-order policies for the joint replenishment problem by the compensation approach," European Journal of Operational Research, Elsevier, vol. 141(3), pages 587-595, September.
    10. Lee, Loo Hay & Chew, Ek Peng, 2005. "A dynamic joint replenishment policy with auto-correlated demand," European Journal of Operational Research, Elsevier, vol. 165(3), pages 729-747, September.
    11. Nielsen, Christina & Larsen, Christian, 2005. "An analytical study of the Q(s,S) policy applied to the joint replenishment problem," European Journal of Operational Research, Elsevier, vol. 163(3), pages 721-732, June.
    12. Dinçer Konur & Brian Schaefer, 2016. "Economic and environmental comparison of grouping strategies in coordinated multi-item inventory systems," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 67(3), pages 421-436, March.
    13. Derek R. Atkins & Paul O. Iyogun, 1988. "Periodic Versus "Can-Order" Policies for Coordinated Multi-Item Inventory Systems," Management Science, INFORMS, vol. 34(6), pages 791-796, June.
    14. Eynan, Amit & Kropp, Dean H., 2007. "Effective and simple EOQ-like solutions for stochastic demand periodic review systems," European Journal of Operational Research, Elsevier, vol. 180(3), pages 1135-1143, August.
    15. S. Viswanathan, 1997. "Note. Periodic Review (s, S) Policies for Joint Replenishment Inventory Systems," Management Science, INFORMS, vol. 43(10), pages 1447-1454, October.
    16. Yu-Sheng Zheng & A. Federgruen, 1991. "Finding Optimal (s, S) Policies Is About As Simple As Evaluating a Single Policy," Operations Research, INFORMS, vol. 39(4), pages 654-665, August.
    17. S. K. Goyal, 1974. "Determination of Optimum Packaging Frequency of Items Jointly Replenished," Management Science, INFORMS, vol. 21(4), pages 436-443, December.
    18. Porras, Eric & Dekker, Rommert, 2008. "A solution method for the joint replenishment problem with correction factor," International Journal of Production Economics, Elsevier, vol. 113(2), pages 834-851, June.
    19. R Y K Fung & X Ma, 2001. "A new method for joint replenishment problems," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(3), pages 358-362, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Mostafa Parsa & Ali Shahandeh Nookabadi & Zümbül Atan & Yaser Malekian, 2022. "An optimal inventory policy for a multi-echelon closed-loop supply chain of postconsumer recycled content products," Operational Research, Springer, vol. 22(3), pages 1887-1938, July.
    2. Xuefei Shi & Haiyan Wang, 2022. "Design of the cost allocation rule for joint replenishment to an overseas warehouse with a piecewise linear holding cost rate," Operational Research, Springer, vol. 22(5), pages 4905-4929, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Khouja, Moutaz & Goyal, Suresh, 2008. "A review of the joint replenishment problem literature: 1989-2005," European Journal of Operational Research, Elsevier, vol. 186(1), pages 1-16, April.
    2. Larsen, Christian, 2009. "The Q(s,S) control policy for the joint replenishment problem extended to the case of correlation among item-demands," International Journal of Production Economics, Elsevier, vol. 118(1), pages 292-297, March.
    3. Kouki, Chaaben & Babai, M. Zied & Jemai, Zied & Minner, Stefan, 2016. "A coordinated multi-item inventory system for perishables with random lifetime," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 226-237.
    4. Tsai, Chieh-Yuan & Tsai, Chi-Yang & Huang, Po-Wen, 2009. "An association clustering algorithm for can-order policies in the joint replenishment problem," International Journal of Production Economics, Elsevier, vol. 117(1), pages 30-41, January.
    5. Larsen, Christian & Turkensteen, Marcel, 2014. "A vendor managed inventory model using continuous approximations for route length estimates and Markov chain modeling for cost estimates," International Journal of Production Economics, Elsevier, vol. 157(C), pages 120-132.
    6. Larsen, Christian, 2019. "A heuristic joint replinishment policy for the case of heterogeneity among items," International Journal of Production Economics, Elsevier, vol. 209(C), pages 164-171.
    7. Wang, Lin & He, Jing & Wu, Desheng & Zeng, Yu-Rong, 2012. "A novel differential evolution algorithm for joint replenishment problem under interdependence and its application," International Journal of Production Economics, Elsevier, vol. 135(1), pages 190-198.
    8. S G Johansen & P Melchiors, 2003. "Can-order policy for the periodic-review joint replenishment problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(3), pages 283-290, March.
    9. Jen-Yen Lin & Ming-Jong Yao, 2020. "The joint replenishment problem with trade credits," Journal of Global Optimization, Springer, vol. 76(2), pages 347-382, February.
    10. Cui, Ligang & Deng, Jie & Liu, Rui & Xu, Dongyang & Zhang, Yajun & Xu, Maozeng, 2020. "A stochastic multi-item replenishment and delivery problem with lead-time reduction initiatives and the solving methodologies," Applied Mathematics and Computation, Elsevier, vol. 374(C).
    11. Ji Seong Noh & Jong Soo Kim & Biswajit Sarkar, 2019. "Stochastic joint replenishment problem with quantity discounts and minimum order constraints," Operational Research, Springer, vol. 19(1), pages 151-178, March.
    12. Stefanny Ramirez & Laurence H. Brandenburg & Dario Bauso, 2023. "Coordinated Replenishment Game and Learning Under Time Dependency and Uncertainty of the Parameters," Dynamic Games and Applications, Springer, vol. 13(1), pages 326-352, March.
    13. Olsen, Anne L., 2008. "Inventory replenishment with interdependent ordering costs: An evolutionary algorithm solution," International Journal of Production Economics, Elsevier, vol. 113(1), pages 359-369, May.
    14. Eynan, Amit & Kropp, Dean H., 2007. "Effective and simple EOQ-like solutions for stochastic demand periodic review systems," European Journal of Operational Research, Elsevier, vol. 180(3), pages 1135-1143, August.
    15. Kiesmüller, G.P., 2009. "A multi-item periodic replenishment policy with full truckloads," International Journal of Production Economics, Elsevier, vol. 118(1), pages 275-281, March.
    16. Larsen, Christian, 2007. "The Q(s,S) control policy for the joint replenishment problem extended to the case of correlation among item-demands," CORAL Working Papers L-2007-01, University of Aarhus, Aarhus School of Business, Department of Business Studies.
    17. De Moor, Bram J. & Creemers, Stefan & Boute, Robert N., 2023. "Breaking truck dominance in supply chains: Proactive freight consolidation and modal split transport," International Journal of Production Economics, Elsevier, vol. 257(C).
    18. Nilsson, Andreas & Segerstedt, Anders & van der Sluis, Erik, 2007. "A new iterative heuristic to solve the joint replenishment problem using a spreadsheet technique," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 399-405, July.
    19. Bayindir, Z.P. & Birbil, S.I. & Frenk, J.B.G., 2006. "The joint replenishment problem with variable production costs," European Journal of Operational Research, Elsevier, vol. 175(1), pages 622-640, November.
    20. Hoque, M.A., 2006. "An optimal solution technique for the joint replenishment problem with storage and transport capacities and budget constraints," European Journal of Operational Research, Elsevier, vol. 175(2), pages 1033-1042, December.

    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:spr:operea:v:20:y:2020:i:3:d:10.1007_s12351-018-0399-9. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.