Exploiting Random Lead Times for Significant Inventory Cost Savings

Taking Advantage of the Lead Time Randomness in Supply Chains lead times is a major—and increasingly important—issue inventory management, as variety risk factors motivate companies to diversify their supply sources and rely on distributed networks suppliers. In “Exploiting Random Times for Significant Inventory Cost Savings,” A. Stolyar Q. Wang show that, surprisingly, instead being damaging factor chain performance, randomness may be harnessed potentially very substantial reductions costs. Specifically, theoretical analysis simulation results paper demonstrate under certain conditions, appropriately designed novel policies can significantly outperform conventional base stock policies.