A Mixed-integer Linear Programming model is proposed to determine the optimal number, location and capacity of the warehouses required to support a long-term forecast for a business with seasonal demand. Discrete transportation costs, dynamic warehouse contracting, and the handling of safety stock are the three main distinctive features of the problem. Four alternatives for addressing discrete ...

A simulation-based optimization framework involving simultaneous perturbation stochastic approximation (SPSA) is presented as a means for optimally specifying parameters of internal model control (IMC) and model predictive control (MPC)-based decision policies for inventory management in supply chains under conditions involving supply and demand uncertainty. The effective use of the SPSA techni...

We study a two-echelon supply chain with one warehouse and N (nonidentical) retailers facing stochastic demand. An easy-to-implement inventory policy, the so-called power-of-two (POT) policy, is proposed to manage inventory for the system. To maintain a certain service level, safety stocks are kept at the warehouse and each retailer outlet to buffer random demand. Our analysis highlights the im...

The capabilities of the Insurance Institute for Business & Home Safety (IBHS) Research Center full-scale test chamber are described in detail. This research facility allows complete full-scale structures to be tested. Testing at full-scale allows vulnerabilities of structures to be evaluated with fewer assumptions than was previously possible. Testing buildings under realistic elevated wind spe...

The inventory management system plays a vital role in a pharmaceutical industry. For every business, managing an inventory is important whether it is small or big, domestic or international business. In a pharmaceutical company, the raw materials have an expiry date associated with them so it becomes important to set a minimal safety stock for such items. The companies mostly try out keeping a ...

Risk pooling has been studied extensively in the operations management literature as the basic driver behind strategies such as transshipment, manufacturing flexibility, component commonality, and drop-shipping. This paper explores the benefit of risk pooling in the context of inventory management using the canonical model first studied in Eppen (1979). Specifically, we consider a single-period...

Successful implementation of an inventory optimization solution requires significant effort and can pose certain risks to companies implementing such solutions. Depending on the complexity of the requirements, the solution may also involve a substantial IT investment. In this paper, we present a cost-effective solution for inventory optimization that can be useful for small and mediumsized busi...

This paper is aimed at filling the gap between theory and practice in the area of safety stocks under MRP environments. It is focused on providing a new methodology for dimensioning an overall buffer against uncertainty in market demand, which often plagues SMEs – that act as sub-contractors or suppliers within large projects or they have a reduced bargaining power – and adversely affects their...

This paper shows that in a buffer stock saving model, wealth-to-income and other interesting variables have unique stable invariant distributions. Previously this ergodic property has only been conjectured and demonstrated numerically by means of simulations. The proof proceeds by extending earlier results about the existence and uniqueness of an ergodic distribution to Markov processes on non-...

Based on a particular case study, this paper presents two approaches to buffer management under demand uncertainty, which is characterized by high lumpiness, dispersion and volatility. The common theme of both of the two approaches is not to find an advanced statistical method to improve demand forecast on the basis of historical data. Rather, these approaches provide new business paradigms to ...