Heuristic Approach to Inventory Control with Advance Capacity Information

• Authors: Marko Jakšič , Borut Rusjan
• Languages of publication: EN

Abstracts

EN

There is a growing trend of information sharing within modern supply chains. This trend is mainly stimulated by recent developments in information technology and the increasing awareness that accurate and timely information helps firms cope with volatile and uncertain business conditions. We model a periodic-review, single-item, capacitated stochastic inventory system, where a supply chain member has the ability to obtain advance capacity information (‘ACI’) about future supply capacity availability. ACI is used to reduce the uncertainty of future supply and thus enables the decision-maker to make better ordering decisions. We develop an easily applicable heuristic based on insights gained from an analysis of the optimal policy. In a numerical study we quantify the benefits of ACI and compare the performance of the proposed heuristic with the optimal performance. We illustrate the conditions in which the procedure is working well and comment on its practical applicability.

Keywords

EN

Operational research; inventory; stochastic models; advance capacity information; heuristic

• Publisher: Sciendo
• Journal: Organizacija
• Year: 2009
• Volume: 42
• Issue: 4
• Pages: 129-136

Dates

published

2009-07-01

online

2009-07-30

Contributors

author

Marko Jakšič

author

Borut Rusjan

• Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia, Kardeljeva ploščad 17, Ljubljana

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Identifiers

DOI

10.2478/v10051-009-0010-5