In this paper, we propose a simultaneous approach to incorporate inventory control decisions––such as economic order quantity and safety stock decisions––into typical facility location models, which are used to solve the distribution network design problem. A simultaneous model is developed considering a stochastic demand, modeling also the risk pooling phenomenon. We present a non-linear-mixed...

The lifecycles of many products are becoming shorter and shorter as innovation and timeto-market become key aspects of modern corporations' success in the marketplace. Few methods for inventory management exist that are capable of contending with product lifecycles measured in months rather than years. This situation is especially acute in the semiconductor industry, where a single generation o...

We present a two-echelon dual-channel inventory model in which stocks are kept in both a manufacturer warehouse (upper echelon) and a retail store (lower echelon), and the product is available in two supply channels: a traditional retail store and an Internet-enabled direct channel. The system receives stochastic demand from two customer segments: those who prefer the traditional retail store a...

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...

The practical experiences reveal that the Supply Chain Management (SCM) is under uncertain and variable conditions. One of the most important parts of SCM is inventory system management which is inherently in non-deterministic situation. The many departments of organization such as warehouse, marketing, sale, purchasing, financial, planning, production, maintenance and etc. are relevance to the...

Contributions to a supply chain’s overall cost function (such as the bullwhip effect) are sensitive to the different players’ ordering policies. This chapter addresses the problem of developing ordering policies which minimise the overall supply chain cost. Evolutionary Algorithms have been used to evolve such ordering policies. The authors of this chapter extend existing research in a number o...

This paper addresses the multi-period single-item inventory lot-sizing problem with stochastic demands under the ‘‘static–dynamic uncertainty’’ strategy of Bookbinder and Tan (Manage. Sci. 34 (1988) 1096). In the static-dynamic uncertainty strategy, the replenishment periods are fixed at the beginning of the planning horizon, but the actual orders are determined only at those replenishment peri...

In many industrial environments there is a significant class of problems for which the perishable nature of the inventory cannot be ignored in developing replenishment order plans. Food is the most salient example of a perishable inventory item. In this work, we consider the periodic-review, single-location, single-product production/inventory control problem under non-stationary stochastic dem...

We study stochastic inventory planning with lost sales and instantaneous replenishment, where contrary to the classical inventory theory, the knowledge of the demand distribution is not available. Furthermore, we observe only the sales quantity in each period, and lost sales are unobservable, that is, demand data are censored. The manager must make an ordering decision in each period based only...

Although revenue management (RM) originates from service industries, its ideas are also relevant for manufacturing environment. In this paper, we consider RM approaches for demand fulfillment in a make-to-stock (MTS) production system with known exogenous replenishments and stochastic demand from multiple customer classes. We propose a safety margin model which borrows the “safety stock” idea f...