Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/313378 
Year of Publication: 
2022
Citation: 
[Journal:] OR Spectrum [ISSN:] 1436-6304 [Volume:] 44 [Issue:] 4 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2022 [Pages:] 1009-1044
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
In this paper, we study a stochastic single-item, single-stage inventory system, in which orders from several production facilities are placed at one warehouse. An ( R ,  Q ) policy is applied to control the inventory at the warehouse, and orders arrive according to a Poisson process and include a due date such that some information about future demand is available. This advance demand information (ADI) can be used to adapt a time-based shipment consolidation policy applied to replenish stock at the production facilities. We develop a model to incorporate flexible deliveries, indicating that orders can be shipped before their due date if sufficient reserved transportation capacity is available. We derive analytical, approximate expressions for the expected inventory and shipment costs and therefore enable the evaluation of different inventory and shipment policies including outbound transportation capacities. We additionally show how to compute the optimal policy parameters and conduct a detailed numerical study. Our computational experiments indicate that our approximation works extremely well, with an average total cost deviation of 0.20%, and finds optimal policy parameters in more than 90% of our instances. In line with existing research, we can show that ADI leads to large cost reductions. However, the main cause of the cost reduction is the flexible delivery option. To be able to completely utilize this option, even larger safety stocks are obtained compared to systems without ADI, but savings due to a more efficient transportation policy far exceed the cost increase due to higher safety stocks.
Subjects: 
Inventory system
Advance demand information
Time-based shipment consolidation
Continuous review
Outbound transportation capacity
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.