This paper considers a single-item, two-echelon, continuous-review inventory model. A number of retailers have their stock replenished from a central warehouse. The warehouse in turn replenishes stock from an external supplier. The demand processes on the retailers are independent Poisson. Demand not met at a retailer is lost. The order quantity from each retailer on the warehouse and from the ...

We consider a manufacturing system where the quality of the end product is uncertain and is graded into one of several quality levels after production. We assume stochastic demand for each quality level, stochastic production times, and random quality yields. We also assume downward substitutability (i.e., customers who require a given product will be satis®ed by a higher quality product at the...

This paper studies an inventory policy for a retailer who orders his products from a supplier whose deliveries only partially satisfy the quality requirements. We model this situation by an infinite-horizon periodic-review model with binomial random yield and positive lead time. We propose an orderup-to policy based on approximating the inventory model with unreliable supplier by a model with a...

We consider a class of single-stage, single-product Make-to-Stock productioninventory system (MTS system) with backorders. The system employs a continuous-review base-stock policy which strives to maintain a prescribed base-stock level of inventory. In a previous paper of Zhao and Melamed (Methodology and Computing in Applied Probability 8:191–222, 2006), the Infinitesimal Perturbation Analysis...

In the considered multistage supply chain, the product structure determines the organization of the network of enterprises that cooperate to manufacture end-products from raw materials. This paper proposes to describe such a multistage supply chain by a sequence of linear dynamical models with distributed delays. The assumed autonomy and information privacy of production units imposes structura...

Errors in order forecasts are a salient source of inefficiencies in retail supply chains. Many operational decisions made by suppliers hinge on order forecasts, which typically are based solely on either order or point-of-sale (POS) history. Using a discrete-time formulation, this research demonstrates that if a supplier knows that a retailer is using a base stock policy, it should use that kno...

In this paper, the Bayesian approach to demand estimation is outlined for the cases of stationary as well as non-stationary demand. The optimal policy is derived for an inventory model that allows stock disposal, and is shown to be the solution of a dynamic programming backward recursion. Then, a method is given to search for the optimal order level around the myopic order level. Finally, a num...

We analyse a single echelon single item inventory system where the demand and the lead time are stochastic. Demand is modelled as a compound Poisson process and the stock is controlled according to a continuous time order-up-to level policy. We propose a new method for determining the optimal order-up-to level for a cost oriented inventory systems where unfilled demands are backordered. The con...

Manufacturing systems are often composed of machines that can produce a variety of items but that most undergo time-consuming (and possibly costly) setups when switching between product types. Scheduling these setups efficiently can have important economic effects on the performance of the plant and involves a tradeoff between throughput, inventory, and operating costs. In addition, the schedul...