OPTIMAL CENTRALIZED ORDERING POLICIES IN MULTIECHELON INVENTORY SYSTEMS WITH CORRELATED DEMANDS

Date

1990-03-01

Author

ERKIP, N
HAUSMAN, WH
NAHMIAS, S

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

31
views

0
downloads

This paper treats a depot-warehouse system in which demand occurs at the warehouse or retail level. This work differs from a number of other studies in that we allow item demands to be correlated both across warehouses and also correlated in time. Our motivation for this generalization arises from our experience with an actual system of this type used by a major national producer and distributor of consumer products. We observed both high correlations between successive monthly demands (around 0.7) and correlations between demands for an item at different locations (also about 0.7) in a given time period. We derive an explicit expression for the optimal safety stock as a function of the level of correlation through time. The analysis requires two assumptions: 1) the allocation assumption and 2) the equal coefficient of variation assumption. (Similar assumptions have been used by other researchers.) Finally, numerical evaluations are included to illustrate the impact of the various magnitudes of correlation.

Subject Keywords

Management Science and Operations Research, Strategy and Management, Optimal centralized, Ordering policies

URI

https://hdl.handle.net/11511/66772

Journal

MANAGEMENT SCIENCE

DOI

https://doi.org/10.1287/mnsc.36.3.381

Collections

Department of Industrial Engineering, Article

Suggestions

OpenMETU
Core

Optimal pricing and ordering policy for non-instantaneous deteriorating items under inflation and customer returns Ghoreishi, M.; Mirzazadeh, A.; Weber, Gerhard Wilhelm (Informa UK Limited, 2014-01-01) This paper deals with an economic production quantity inventory model for non-instantaneous deteriorating items under inflationary conditions considering customer returns. We adopt a price-and time-dependent demand function. Also, the customer returns are considered as a function of both price and demand. The effects of time value of money are studied using the Discounted Cash Flow approach. The main objective is to determine the optimal selling price, the optimal replenishment cycles, and the optimal produ...
JOB-SHOP SCHEDULING UNDER A NONRENEWABLE RESOURCE CONSTRAINT TOKER, A; KONDAKCI, S; ERKIP, N (JSTOR, 1994-08-01) In this paper we consider the job shop scheduling problem under a discrete non-renewable resource constraint. We assume that jobs have arbitrary processing times and resource requirements and there is a unit supply of the resource at each time period. We develop an approximation algorithm for this problem and empirically test its effectiveness in finding the minimum makespan schedules.
Optimal allocation policies in a two-echelon inventory problem with fixed shipment costs Gullu, R; Erkip, N (1996-12-01) This study investigates the stock allocation problems in a two-echelon distribution system which consists of a central warehouse and two identical retailers. We restrict our attention to two-period order cycles where the period lengths are allowed to be different. Shipments from the supplier to the warehouse arrive at the beginning of the order cycle (i.e. at the beginning of the first period). In each order cycle, there are two shipment opportunities from the warehouse to the retailers: at the beginning of...
Optimal allocation and processing time decisions on non-identical parallel CNC machines: epsilon-constraint approach Gürel, Sinan (Elsevier BV, 2007-12-01) When the processing times of jobs are controllable, selected processing times affect both the manufacturing cost and the scheduling performance. A well known example for such a case that this paper specifically deals with is the turning operation on a CNC machine. Manufacturing cost of a turning operation is a nonlinear convex function of its processing time. In this paper, we deal with making optimal machine-job assignments and processing time decisions so as to minimize total manufacturing cost while the ...
Order picking in parallel-aisle warehouses with multiple blocks: complexity and a graph theory-based heuristic ÇELİK, MELİH; Süral, Haldun (Informa UK Limited, 2019-02-01) In this paper, we consider the order picking problem (OPP), which constitutes one of the special cases of the Steiner travelling salesperson problem and addresses the costliest operation in a warehouse. Given a list of items to be picked and their locations in the warehouse layout, the OPP aims to find the shortest route that starts from a depot point, picks all the items in the list, and returns to the depot. This paper fills two important gaps regarding the OPP. First, to the best of our knowledge, we pre...

Citation Formats

N. ERKIP, W. HAUSMAN, and S. NAHMIAS, “OPTIMAL CENTRALIZED ORDERING POLICIES IN MULTIECHELON INVENTORY SYSTEMS WITH CORRELATED DEMANDS,” MANAGEMENT SCIENCE, pp. 381–392, 1990, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/66772.