IDEAS home Printed from https://ideas.repec.org/a/wly/navres/v61y2014i5p418-426.html
   My bibliography  Save this article

Inventory control and replenishment with flexible delivery‐time upgrade

Author

Listed:
  • Xiaoying Liang
  • Houmin Yan

Abstract

We consider a capacitated inventory model with flexible delivery upgrades, in which the seller allocates its on‐hand inventory to price‐ and delivery‐time‐sensitive customers. The seller has two decisions: inventory commitment and replenishment. The former addresses how the on‐hand inventories are allocated between the two classes of customers within an inventory cycle. The latter addresses how the inventory is replenished between inventory cycles. We develop optimal inventory allocation, upgrade, and replenishment policies and demonstrate that the optimal policy can be characterized by a set of switching curves. © 2014 Wiley Periodicals, Inc. Naval Research Logistics 61: 418–426, 2014

Suggested Citation

  • Xiaoying Liang & Houmin Yan, 2014. "Inventory control and replenishment with flexible delivery‐time upgrade," Naval Research Logistics (NRL), John Wiley & Sons, vol. 61(5), pages 418-426, August.
    • Handle: RePEc:wly:navres:v:61:y:2014:i:5:p:418-426
    DOI: 10.1002/nav.21592
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/nav.21592
    Download Restriction: no
    File URL: https://libkey.io/10.1002/nav.21592?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
    ---><---

    References listed on IDEAS

    as
    1. Richard V. Evans, 1967. "Inventory control of a multiproduct system with a limited production resource," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 14(2), pages 173-184.
    2. Gabriel R. Bitran & Susana V. Mondschein, 1997. "Periodic Pricing of Seasonal Products in Retailing," Management Science, INFORMS, vol. 43(1), pages 64-79, January.
    3. Donald M. Topkis, 1968. "Optimal Ordering and Rationing Policies in a Nonstationary Dynamic Inventory Model with n Demand Classes," Management Science, INFORMS, vol. 15(3), pages 160-176, November.
    4. Bruce Hajek, 1985. "Extremal Splittings of Point Processes," Mathematics of Operations Research, INFORMS, vol. 10(4), pages 543-556, November.
    5. Gregory A. DeCroix & Antonio Arreola-Risa, 1998. "Optimal Production and Inventory Policy for Multiple Products Under Resource Constraints," Management Science, INFORMS, vol. 44(7), pages 950-961, July.
    6. Arthur F. Veinott, 1965. "Optimal Policy in a Dynamic, Single Product, Nonstationary Inventory Model with Several Demand Classes," Operations Research, INFORMS, vol. 13(5), pages 761-778, October.
    7. Albert Y. Ha, 1997. "Inventory Rationing in a Make-to-Stock Production System with Several Demand Classes and Lost Sales," Management Science, INFORMS, vol. 43(8), pages 1093-1103, August.
    8. A. Federgruen & P. Zipkin, 1986. "An Inventory Model with Limited Production Capacity and Uncertain Demands II. The Discounted-Cost Criterion," Mathematics of Operations Research, INFORMS, vol. 11(2), pages 208-215, May.
    9. A. Federgruen & P. Zipkin, 1986. "An Inventory Model with Limited Production Capacity and Uncertain Demands I. The Average-Cost Criterion," Mathematics of Operations Research, INFORMS, vol. 11(2), pages 193-207, May.
    10. Francis de Véricourt & Fikri Karaesmen & Yves Dallery, 2002. "Optimal Stock Allocation for a Capacitated Supply System," Management Science, INFORMS, vol. 48(11), pages 1486-1501, November.
    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. Chen, Gang & Feng, Haolin & Luo, Kaiyi & Tang, Yanli, 2021. "Retrieval-oriented storage relocation optimization of an automated storage and retrieval system," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).

    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. ElHafsi, Mohsen & Fang, Jianxin & Hamouda, Essia, 2021. "Optimal production and inventory control of multi-class mixed backorder and lost sales demand class models," European Journal of Operational Research, Elsevier, vol. 291(1), pages 147-161.
    2. Bo Li & Antonio Arreola‐Risa, 2022. "Minimizing conditional value‐at‐risk under a modified basestock policy," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1822-1838, April.
    3. Alfieri, Arianna & Pastore, Erica & Zotteri, Giulio, 2017. "Dynamic inventory rationing: How to allocate stock according to managerial priorities. An empirical study," International Journal of Production Economics, Elsevier, vol. 189(C), pages 14-29.
    4. F. Kleintje-Ell & G. Kiesmüller, 2015. "Cost minimising order schedules for a capacitated inventory system," Annals of Operations Research, Springer, vol. 229(1), pages 501-520, June.
    5. Tong Wang & Beril L. Toktay, 2008. "Inventory Management with Advance Demand Information and Flexible Delivery," Management Science, INFORMS, vol. 54(4), pages 716-732, April.
    6. Samii, Amir-Behzad & Pibernik, Richard & Yadav, Prashant, 2011. "An inventory reservation problem with nesting and fill rate-based performance measures," International Journal of Production Economics, Elsevier, vol. 133(1), pages 393-402, September.
    7. Weihua Zhou & Chung‐Yee Lee & David Wu, 2011. "Optimal control of a capacitated inventory system with multiple demand classes," Naval Research Logistics (NRL), John Wiley & Sons, vol. 58(1), pages 43-58, February.
    8. Mohammad Najjartabar Bisheh & G. Reza Nasiri & Esmaeil Esmaeili & Hamid Davoudpour & Shing I. Chang, 2022. "A new supply chain distribution network design for two classes of customers using transfer recurrent neural network," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 13(5), pages 2604-2618, October.
    9. Tan, Tarkan & Güllü, Refik & Erkip, Nesim, 2009. "Using imperfect advance demand information in ordering and rationing decisions," International Journal of Production Economics, Elsevier, vol. 121(2), pages 665-677, October.
    10. Hasan Arslan & Stephen C. Graves & Thomas A. Roemer, 2007. "A Single-Product Inventory Model for Multiple Demand Classes," Management Science, INFORMS, vol. 53(9), pages 1486-1500, September.
    11. FadIloglu, Mehmet Murat & Bulut, Önder, 2010. "A dynamic rationing policy for continuous-review inventory systems," European Journal of Operational Research, Elsevier, vol. 202(3), pages 675-685, May.
    12. van Jaarsveld, W.L. & Dekker, R., 2009. "Finding optimal policies in the (S - 1, S ) lost sales inventory model with multiple demand classes," Econometric Institute Research Papers EI 2009-14, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    13. Bing Lin & Shaoxiang Chen & Yi Feng & Jianjun Xu, 2018. "The Joint Stock and Capacity Rationings of a Make-To-Stock System with Flexible Demand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(01), pages 1-27, February.
    14. Paul Zipkin, 2008. "On the Structure of Lost-Sales Inventory Models," Operations Research, INFORMS, vol. 56(4), pages 937-944, August.
    15. Xu, Jianjun & Serrano, Alejandro & Lin, Bing, 2017. "Optimal production and rationing policy of two-stage tandem production system," International Journal of Production Economics, Elsevier, vol. 185(C), pages 100-112.
    16. Karin T. Möllering & Ulrich W. Thonemann, 2008. "An optimal critical level policy for inventory systems with two demand classes," Naval Research Logistics (NRL), John Wiley & Sons, vol. 55(7), pages 632-642, October.
    17. Alvarez, E.M. & van der Heijden, M.C. & Zijm, W.H.M., 2013. "The selective use of emergency shipments for service-contract differentiation," International Journal of Production Economics, Elsevier, vol. 143(2), pages 518-526.
    18. Shrutivandana Sharma & Hossein Abouee‐Mehrizi & Giorgio Sartor, 2020. "Inventory Management under Storage and Order Restrictions," Production and Operations Management, Production and Operations Management Society, vol. 29(1), pages 101-117, January.
    19. Ganesh Janakiraman & Mahesh Nagarajan & Senthil Veeraraghavan, 2018. "Simple Policies for Managing Flexible Capacity," Manufacturing & Service Operations Management, INFORMS, vol. 20(2), pages 333-346, May.
    20. Vinayak Deshpande & Morris A. Cohen & Karen Donohue, 2003. "A Threshold Inventory Rationing Policy for Service-Differentiated Demand Classes," Management Science, INFORMS, vol. 49(6), pages 683-703, June.

    More about this item

    Statistics

    Access and download statistics

    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:wly:navres:v:61:y:2014:i:5:p:418-426. 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: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1520-6750 .

    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.