We consider a single-echelon, single-item inventory system where both demand and lead-time are stochastic. Continuous review policy is used to control the inventory system. The objective is to calculate the reorder point level under stochastic parameters. A case study is presented in Neonatal Intensive Care Unit. Keywords—Inventory control system, reorder point level, stochastic demand, stochas...

Most inventory researches assume that the production level can be fluctuated arbitrarily. However, in many firms, large fluctuation in production levels may be very costly. This paper addresses the coordinated pricing and inventory control problem in a smoothing production system, in which the production level is constrained between a maximum and a minimum level in each period and the price can...

In this paper we present a quantity-based model for integrated inventory replenishment and shipment consolidation decisions under vendor managed inventory. Assuming the vendor uses a special reorder point, order-up-to level, or ( , ) s S policy for inventory control and adopts a quantity-based dispatching strategy under stochastic settings, we build its simulation model. By simulating in Arena ...

In this paper, we study an unreliable multi-product production/inventory system consisting of N production machines and an assembly machine. The final products are assembled-to-order whereas components are built at N separate production machines on a make-to-stock routine. The objective of our study is to develop an integrated optimal control policy that minimizes the total long-run average cos...

Abstract Using state space techniques we study a “myopic” order-up-to policy. The policy is myopic because is it is optimal at minimising local inventory holding and shortage costs. In particular we study the bullwhip effect produced by the replenishment policy reacting arbitrary stochastic demand processes. We reveal that bullwhip is fundamentally caused by the co-variance between the inventor...

We consider a realistic model of a multiclass make-to-stock manufacturing system. External demand for each product class is met from the available nished goods inventory; unsatis ed demand is backlogged. The objective is to devise a production policy that minimizes inventory costs subject to guaranteeing stockout probabilities to stay bounded above by given constants j , for each product class ...

Once a new product is available, if the company starts the sales without building an initial inventory (myopic policy), the demand for the product grows rapidly due to extensive word of mouth spreading from past sales and soon may exceed the firm’s capacity resulting in lost sales. To avoid this problem, companies generally delay product launch to build sufficient inventory prior to starting sa...

In some retail contexts, higher inventories not only improve service levels, but also stimulate demand by serving as a promotional tool (e.g., by increasing product visibility). Motivated by a building-products retailer’s practice of stocking large quantities of products to stimulate demand, we study inventory management policies when demand is uncertain but increases with stocking quantity. Fo...

In this paper, an integrated inventory model is developed from the perspective of a single vendor and multi-buyers for deteriorating items under fuzzy environment and inflation. In the development of the model, it is assumed that all costs parameters, demand and the production rates are imprecise in nature; they are represented by the trapezoidal fuzzy numbers, as these parameters are not const...

This paper studies dynamic inventory and pricing decisions for a set of substitutable products over a finite planning horizon. We present a general stochastic, price-dependent demand model that unifies many commonly used demand models in the literature. Unsatisfied demands are backlogged. There are linear purchasing, inventory-holding, and backordering costs. The objective is to maximize the to...