Value of disruption information in an EOQ environment

Download

index.pdf

Date

2014

Author

Emer, Deniz Esin

Metadata

Show full item record

Item Usage Stats

50
views

72
downloads

Supply disruptions have important effects on supply chains causing serious financial and intangible damages. In this study, we consider an infinite horizon, continuous review inventory model with deterministic stationary demand where supply is subject to disruption. The supply process alternates between two states randomly: one in which it functions normally ("ON" period) and one in which it is disrupted ("OFF" period). Unsatisfied demand is backordered in off periods. In this setting we seek the value of disruption orders which can be placed at the beginning of OFF-periods with the same fixed cost. Utilizing renewal theory, we derive the total expected cost function and determine the cost minimizing regular order-up-to level and characterize the order-up-to level for disruption orders. We also conduct an extensive numerical analysis and compare the results with the model with no opportunity of disruption orders. We conclude that if the shortage cost is relatively high, placing disruption order always reduces or does not change the expected total cost and if disruption orders are placed then the regular order-up-to levels is generally so close to EQO with backorders.

Subject Keywords

Business logistics., Supply and demand., Industrial management.

URI

http://etd.lib.metu.edu.tr/upload/12617732/index.pdf
https://hdl.handle.net/11511/23909

Collections

Graduate School of Natural and Applied Sciences, Thesis

Suggestions

OpenMETU
Core

Value of disruption information in an EOQ environment Bakal, İsmail Serdar; Bayındır, Zeynep Pelin (2017-12-01) We consider an infinite horizon, continuous review inventory model with deterministic stationary demand where supply is subject to disruption. The supply process alternates between two states randomly: one in which it functions normally (ON-period) and one in which it is disrupted (OFF-period). In this setting, we seek the value of disruption information which enables the buyer to place "disruption orders" at the beginning of OFF-periods. Utilizing renewal theory, we derive the total expected cost and chara...
Value of quality information of returns in product recovery management Atabarut, Altan; Bayındır, Zeynep Pelin; Department of Industrial Engineering (2009) Returned products of many industries are transported backwards through supply chains for recovery, thus forming “closed-loop supply chains”. Benefits, forthcoming with more effective management of recovery of returns are gaining importance. However, some issues, such as lack of information required to assess the quality of the returned products, may translate into critical uncertainties in the product recovery decisions and prevent closed-loop supply chains from operating efficiently. Hence, it is envisaged...
Optimal Mechanisms to Match Supply and Demand in Contemporary Supply Chains (OPTCHAIN) Merzifonluoğlu, Yasemin(2016-2-07) Emerging production and information technologies have increased competition and consumer expectations, this leads to ever-shrinking product life cycles, volatile and unpredictable markets. In addition, natural disasters, accidents, supply disruptions increased the risk in today’s global and long supply chains. Keeping costs down and customers satisfied in a global marketplace requires companies to proactively manage supply and demand using state of art techniques, technologies and practices. This proposal d...
The Impact of supply base complexity on firm performance Memiş, Huriye; Akın Ateş, Melek.; Department of Business Administration (2019) Supply chain complexity has become a significant concern of the companies especially in the past decade. As a response to this, there have been several studies examining supply chain complexity and performance implications. However, studies focusing on upstream supply chain complexity is rather scant. Sources of supply base complexity and their impacts on firm performance is still under-investigated. The aim of this research is to investigate the impact of supply base complexity on firm performance. Supply ...
Relationship between financial development and logistics performance and their effects on the competitiveness: an empirical cross-country study Özdemir, Levent; Küçükkaya, Halit Engin; Department of Business Administration (2017) Well-functioning financial system efficiently produce information about possible investments to allocate capital, monitor firms after allocating capital, facilitate risk management, mobilize savings and ease the exchange of goods/services. These services significantly affect the countries’ efficiency of logistics which is backbone of trade. As financial development enables the logisticians to access various financial products and services to finance capital assets, working capital and inventory; to insure o...

Citation Formats

D. E. Emer, “Value of disruption information in an EOQ environment,” M.S. - Master of Science, Middle East Technical University, 2014.