Inventory control of spare parts is essential to many organizations, since excess inventory leads to high holding costs and stock outs can have a great impact on operations performance. This paper proposes a methodology for effective spare parts inventory control, motivated by a case study at a large oil refinery. Different demand modeling techniques and inventory policies are evaluated using r...

This paper presents a column generation algorithm for solving combined vehicle and inventory problems. This problem is based on the idea of coordinating customer inventory levels through a minimum routing cost. This is a combinatory decision problem since vehicle routing and inventory problems, are combined. Using the column generation method, we can iteratively generate interesting routes to t...

Most supply chain works suppose retailers can credibly communicate costs to suppliers. But honest cost disclosure can be untenable because stores can shift the inventory burden upstream by inflating marginal costs (e.g., they can reduce stockout rates by exaggerating the goodwill lost to unsatisfied demand). So suppliers may not receive true cost estimates, preventing them from instituting opti...

The objective of this study is to minimize the expected present worth of the production costs incurred over the operational life of a robotic assembly system that is integrated with an Automatic Storage/Retrieval System (AS/RS). Production costs include inventory cost and capital cost of equipment. Inventory cost consists of ordering, holding, and lostproduction costs; and all of these costs de...

We develop an equilibrium business cycle model in which the producers of final goods pursue generalized (S,s) inventory policies with respect to intermediate goods, a consequence of nonconvex factor adjustment costs. Calibrating our model to reproduce the average inventory-to-sales ratio in postwar U.S. data, we find that it explains over half of the cyclical variability of inventory investment...

The need for integration in supply chain management leads us to consider the coordination of two logistic planning functions: transportation and inventory. The coordination of these activities can be an extremely important source of competitive advantage in supply chain management. The battle for cost reduction can involve finding the equilibrium between transportation and inventory management ...

This paper examines “distribution policies” — that is, combined system inventoryreplenishment, vehicle routing and inventory-allocation policies — designed to minimize total expected purchasing and inventory-management (i.e., inventory-holding and backordering) costs/period for a one-warehouse N-retailer “symmetric” distribution system managed under a periodic-review policy. With respect to dyn...

Vendor managed inventory replenishment is a business practice in which vendors monitor their customers’ inventories, and decide when and how much inventory should be replenished. The inventory routing problem addresses the coordination of inventory management and transportation. It needs to be solved to design a strategy that realizes the potential savings in inventory and transportation costs ...

This paper studies convergence properties of optimal values and actions for discounted and averagecost Markov Decision Processes (MDPs) with weakly continuous transition probabilities and applies these properties to the stochastic periodic-review inventory control problem with backorders, positive setup costs, and convex holding/backordering costs. The following results are established for MDPs...