Strategic Safety Stock Placement In Supply Chains
نویسندگان
چکیده
We consider a multi-stage production/distribution supply chain subject to stochastic demand. We formulate an optimization problem to determine where to place decoupling inventories, so-called strategic inventories, across the supply chain so as to minimize inventory holding costs subject to a service constraint for satisfying customer demand. We assume demand is normally distributed. For each stage, we know its lead time, which we assume is deterministic, and we know the cost added at the stage. There are no capacity constraints in the supply chain, and each stage quotes and guarantees a service time by which it will supply its immediate successors. These service times are decision variables for the optimization model. Associated with each stage is a service level, denoting the percentage of time that the guaranteed service time is to be met from inventory. Finally each stage operates with a base-stock control policy; that is, each period each stage orders a quantity equal to its demand.
منابع مشابه
Optimizing Strategic Safety Stock Placement in Supply Chains
Manufacturing managers face increasing pressure to reduce inventories across the supply chain. However, in complex supply chains, it is not always obviouswhere to hold safety stock to minimize inventory costs and provide a high level of service to the final customer. In this paper we develop a framework for modeling strategic safety stock in a supply chain that is subject to demand or forecast ...
متن کاملStrategic Safety Stocks in Supply Chains with Evolving Forecasts
We examine the placement of safety stocks in a supply chain for which we have an evolving demand forecast. Under assumptions about the forecasts, the demand process, and the supply chain structure, we show that safety stock placement for such systems is effectively equivalent to the corresponding well-studied problem for systems with stationary demand bounds and base stock policies. Hence, we c...
متن کاملCorrespondence: Erratum: Optimizing Strategic Safety Stock Placement in Supply Chains
In Graves Willems (2000) we consider the problem of finding the optimal placement of safety stocks in a supply chain with bounded demand and guaranteed service times. We develop a dynamic programming algorithm for supply chains that can be modeled as spanning trees. The intent of this note is to correct an error in the algorithm. Ekaterina Lesnaia of MIT and Dr. Salal Humair of Optiant independ...
متن کاملTechnical Note - Optimizing Strategic Safety Stock Placement in General Acyclic Networks
We present two significant enhancements to the guaranteed-service (GS) model for multiechelon safety stock placement. First, we let each stage’s expected inventory cost be a generalized nonconcave non-closed-form function of its incoming and outgoing service time. This allows the GS model to incorporate important phenomena such as variable stage times and nonnested review periods, which previou...
متن کاملStrategic Inventory Placement in Supply Chains: Nonstationary Demand
T life cycle of new products is becoming shorter and shorter in all markets. For electronic products, life cycles are measured in units of months, with 6to 12-month life cycles being common. Given these short product life cycles, product demand is increasingly difficult to forecast. Furthermore, demand is never really stationary because the demand rate evolves over the life of the product. In t...
متن کامل