Exploring Rush Order Policies in a Multi-Echelon Inventory System
(2026) MIOM05 20261Department of Industrial and Mechanical Sciences
Production Management
- Abstract
- Title: Exploring Rush Order Policies in a Multi-Echelon Inventory System
Authors: Stina Nilsson & Lina Solbu.
Supervisors: Johan Marklund, LTH. Philip Mårtensson & Johan Lidvall,
Volvo Group.
Background: The Case Company is currently transitioning their inventory
control from a single-echelon to a multi-echelon optimization approach. As
no formal rush order policy currently exists, it is of great interest to explore
the impact on rush orders in this transition and investigate the potential value
of introducing rush order policies.
Purpose: The purpose of this thesis is to analyze the rush order processes,
particularly with regards to how decisions are made. Based on the current
situation, the objective is to formulate... (More) - Title: Exploring Rush Order Policies in a Multi-Echelon Inventory System
Authors: Stina Nilsson & Lina Solbu.
Supervisors: Johan Marklund, LTH. Philip Mårtensson & Johan Lidvall,
Volvo Group.
Background: The Case Company is currently transitioning their inventory
control from a single-echelon to a multi-echelon optimization approach. As
no formal rush order policy currently exists, it is of great interest to explore
the impact on rush orders in this transition and investigate the potential value
of introducing rush order policies.
Purpose: The purpose of this thesis is to analyze the rush order processes,
particularly with regards to how decisions are made. Based on the current
situation, the objective is to formulate possible rush order policies that could
be implemented in Volvo Groups’ distribution system. The cost and emission
impact of implementing these policies at the dealers will be analyzed, and the
effect on the number of rush orders will be evaluated through simulation, by
comparing the current system to a proposed MEIO controlled system.
Methodology: The methodology in this thesis consists of two parts. The
first part was an exploratory research study, adopting methods proposed by
Höst et al. (2006). This included an extensive literature study and conducting
interviews with selected employees at the Case Company. A simulation study
framework by Hillier and Lieberman (2021) was employed for the second part
of this thesis, to guideline the numerical study utilizing simulation.
Conclusion: The current order processes lack traceability on the arrival of
incoming stock orders. Access to accurate pipeline information have potential
to reduce the number of unnecessary rush orders. Through simulation, a
pipeline policy was found to reduce the expected number of rush orders by
23.5% in a single-echelon system and by 19.4% in a multi-echelon system. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/student-papers/record/9230697
- author
- Solbu, Lina LU and Nilsson, Stina LU
- supervisor
- organization
- course
- MIOM05 20261
- year
- 2026
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- inventory control, multi-echelon, rush order, pipeline information, spare parts
- other publication id
- 26/5340
- language
- English
- id
- 9230697
- date added to LUP
- 2026-06-03 18:16:27
- date last changed
- 2026-06-03 18:16:27
@misc{9230697,
abstract = {{Title: Exploring Rush Order Policies in a Multi-Echelon Inventory System
Authors: Stina Nilsson & Lina Solbu.
Supervisors: Johan Marklund, LTH. Philip Mårtensson & Johan Lidvall,
Volvo Group.
Background: The Case Company is currently transitioning their inventory
control from a single-echelon to a multi-echelon optimization approach. As
no formal rush order policy currently exists, it is of great interest to explore
the impact on rush orders in this transition and investigate the potential value
of introducing rush order policies.
Purpose: The purpose of this thesis is to analyze the rush order processes,
particularly with regards to how decisions are made. Based on the current
situation, the objective is to formulate possible rush order policies that could
be implemented in Volvo Groups’ distribution system. The cost and emission
impact of implementing these policies at the dealers will be analyzed, and the
effect on the number of rush orders will be evaluated through simulation, by
comparing the current system to a proposed MEIO controlled system.
Methodology: The methodology in this thesis consists of two parts. The
first part was an exploratory research study, adopting methods proposed by
Höst et al. (2006). This included an extensive literature study and conducting
interviews with selected employees at the Case Company. A simulation study
framework by Hillier and Lieberman (2021) was employed for the second part
of this thesis, to guideline the numerical study utilizing simulation.
Conclusion: The current order processes lack traceability on the arrival of
incoming stock orders. Access to accurate pipeline information have potential
to reduce the number of unnecessary rush orders. Through simulation, a
pipeline policy was found to reduce the expected number of rush orders by
23.5% in a single-echelon system and by 19.4% in a multi-echelon system.}},
author = {{Solbu, Lina and Nilsson, Stina}},
language = {{eng}},
note = {{Student Paper}},
title = {{Exploring Rush Order Policies in a Multi-Echelon Inventory System}},
year = {{2026}},
}