Analysis of an inventory system under supply uncertainty

Gullu, R
Onol, E
Erkip, N
In this paper, we analyze a periodic review, single-item inventory model under supply uncertainty. The objective is to minimize expected holding and backorder costs over a finite planning horizon under the supply constraints. The uncertainty in supply is modeled using a three-point probability mass function. The supply is either completely available, partially available, or the supply is unavailable. Machine breakdowns, shortages in the capacity of the supplier, strikes, etc., are possible causes of uncertainty in supply. We demonstrate various properties of the expected cost function, and show the optimality of order-up-to type policies using a stochastic dynamic programming formulation. Under the assumption of a Bernoulli-type supply process, in which the supply is either completely available or unavailable, and when the demand is deterministic and dynamic, we provide a newsboy-like formula which explicitly characterizes the optimal order-up-to levels. An algorithm is given that computes the optimal inventory levels over the planning horizon. Extensions and computational analysis are presented for the case where the partial supply availability has positive probability of occurrence.


Analysis of a deterministic demand production/inventory system under nonstationary supply uncertainty
Gullu, R; Onol, E; Erkip, N (Informa UK Limited, 1997-08-01)
In this article we investigate a periodic review inventory model under deterministic dynamic demand and supply unavailability. In a given period, supply is either available or completely unavailable with given probabilities. Supply unavailability probabilities are nonstationary over time. We show the optimality of an order-up-to level policy, and obtain a newsboy-like formula that determines the optimal order-up-to levels. Our formula would provide guidence as to the appropriate amount of inventory to stock...
Analysis of an inventory system with advance emand information and supply uncertainty
Arıkan, Emel; Süral, Haldun; Department of Industrial Engineering (2005)
In this study we address a periodic review capacitated inventory system with supply uncertainty where advance demand information is available. A stochastic dynamic programming formulation is applied with the objective of minimizing the expected inventory related costs over a finite horizon. Three different supply processes are assumed. Under the all-or-nothing type supply process and partially available supply process, the structure of optimal policy is proved to be a base stock policy and numerical example...
Minimizing the number of tool switching instants in Flexible Manufacturing Systems
Konak, Abdullah; Kulturel-Konak, Sadan; Azizoğlu, Meral (Elsevier BV, 2008-12-01)
In this study, we address a part-type sequencing and tool switching problem arising in Flexible Manufacturing Systems. We consider the single machine problem of minimizing the number of tool switching instants. We propose two tabu search approaches to find high-quality solutions. Our computational results reveal that both tabu search approaches produce optimal or near-optimal solutions in reasonable times.
Quantiative Methodology for Determination of Cost Contingency in International Projects
Sönmez, Rifat; Birgönül, Mustafa Talat (American Society of Civil Engineers (ASCE), 2007-01-01)
This paper presents a quantitative methodology to determine financial impacts of the risk factors during the bidding stages of international construction projects. Project and country data of 26 construction projects from 21 countries were collected for evaluation of the international risk factors. The factors impacting cost contingency were identified using correlation and regression analysis techniques. The results indicated that four factors had major contributions for explaining the variations in the co...
Investigation of process-affected zone in ultrasonic embossing of microchannels on thermoplastic substrates
Sucularli, Ferah; Arıkan, Mehmet Ali Sahir; Yıldırım, Ender (Elsevier BV, 2020-02-01)
In this paper, the process-affected zone in ultrasonically embossed thermoplastic substrates is investigated both numerically and experimentally. Commercialization of microfluidic devices challenges the need for high-speed manufacturing of plastic chips. Ultrasonic embossing is considered as an alternative method since the cycle time can be as low as a few seconds per chip while keeping the cost relatively low. To examine the ultrasonic embossing process, experiments were carried out to replicate 200 mu m w...
Citation Formats
R. Gullu, E. Onol, and N. Erkip, “Analysis of an inventory system under supply uncertainty,” INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS, pp. 377–385, 1999, Accessed: 00, 2020. [Online]. Available: