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Controlling Inventories in Divergent Supply Chains with Advance-Order Information

Marklund, Johan LU (2006) In Operations Research 54(5). p.988-1010
Abstract
This paper considers a generic one-warehouse multiple-retailer inventory system under continuous review, where customers provide perfect advance-order information. More specifically, each customer order entails a due date specifying when the customer wants the item delivered. The information is perfect in the sense that a placed order cannot be revised. With the intent of using the advance-order information fully throughout the supply chain, each installation replenishes its stock using order base-stock policies (see Hariharan and Zipkin 1995). As for stock allocation, the presence of advance-order information at the central warehouse raises important questions regarding when reservations should be made for different retailers, i.e., how... (More)
This paper considers a generic one-warehouse multiple-retailer inventory system under continuous review, where customers provide perfect advance-order information. More specifically, each customer order entails a due date specifying when the customer wants the item delivered. The information is perfect in the sense that a placed order cannot be revised. With the intent of using the advance-order information fully throughout the supply chain, each installation replenishes its stock using order base-stock policies (see Hariharan and Zipkin 1995). As for stock allocation, the presence of advance-order information at the central warehouse raises important questions regarding when reservations should be made for different retailers, i.e., how to make best use of the available temporal information to allocate items to retailers. Exact and approximate cost evaluation techniques are presented for the general case, the general reservation policy, as well as for the two special cases of reserving as early as possible, the complete reservation policy, and as late as possible, the last-minute allocation policy. A numerical study illustrates the performance of the proposed heuristics and provides insights on the value of using advance-order information in supply chain inventory control. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Allocations, Supply chains, Inventory control, Studies, Retail stores, Order processing, Operations research
in
Operations Research
volume
54
issue
5
pages
988 - 1010
publisher
Inst Operations Research Management Sciences
external identifiers
  • wos:000241418500011
  • scopus:33749592426
ISSN
0030-364X
DOI
10.1287/opre.1060.0319
language
English
LU publication?
yes
id
82e0e3ac-3d68-4335-919f-1b476cef53c3 (old id 633043)
date added to LUP
2008-02-07 11:50:10
date last changed
2017-01-01 07:45:58
@article{82e0e3ac-3d68-4335-919f-1b476cef53c3,
  abstract     = {This paper considers a generic one-warehouse multiple-retailer inventory system under continuous review, where customers provide perfect advance-order information. More specifically, each customer order entails a due date specifying when the customer wants the item delivered. The information is perfect in the sense that a placed order cannot be revised. With the intent of using the advance-order information fully throughout the supply chain, each installation replenishes its stock using order base-stock policies (see Hariharan and Zipkin 1995). As for stock allocation, the presence of advance-order information at the central warehouse raises important questions regarding when reservations should be made for different retailers, i.e., how to make best use of the available temporal information to allocate items to retailers. Exact and approximate cost evaluation techniques are presented for the general case, the general reservation policy, as well as for the two special cases of reserving as early as possible, the complete reservation policy, and as late as possible, the last-minute allocation policy. A numerical study illustrates the performance of the proposed heuristics and provides insights on the value of using advance-order information in supply chain inventory control.},
  author       = {Marklund, Johan},
  issn         = {0030-364X},
  keyword      = {Allocations,Supply chains,Inventory control,Studies,Retail stores,Order processing,Operations research},
  language     = {eng},
  number       = {5},
  pages        = {988--1010},
  publisher    = {Inst Operations Research Management Sciences},
  series       = {Operations Research},
  title        = {Controlling Inventories in Divergent Supply Chains with Advance-Order Information},
  url          = {http://dx.doi.org/10.1287/opre.1060.0319},
  volume       = {54},
  year         = {2006},
}