This paper is concerned with a periodic review inventory system with three consecutive delivery modes (fast, medium, and slow) and demand forecast updates. At the beginning of each period, the inventory level and demand information are updated, and decisions on how much to order using each of the three delivery modes are made. Both finite and infinite horizon problems are treated. Objectives co...

We consider a production-inventory system with capacity constraint and item returns correlated to demand. The system is modelled by an M/M/1 make-to-stock queue with lost sales. A satisfied demand incurs an item return with a certain probability, after an exponentially distributed return lead-time. We distinguish two cases: When the number of items to be returned is observable and when it is no...

This paper analyzes a series inventory system with stationary costs and stochastic demand over an infinite horizon. A distinctive feature is that demand can be negative, representing returns from customers, as well as zero or positive. We observe that, as in a system with nonnegative demand, a stationary echelon base-stock policy is optimal here. However, the steadystate behavior of the system ...

Papers involved 1. Bisheng Du, Christian Larsen. 2008. Base stock policies with degraded service to larger orders. Download: http://www.hha.dk/bs/wp/log/L_2008_07.pdf 2. Bisheng Du, Christian Larsen. 2009. Investigating comparative advantages of advance demand information in presence of heterogeneous demand. (General version) 3. Bisheng Du, Christian Larsen. 2009. Comparing reservation policies...

There is a growing consensus that a portfolio of customers with different demand lead times can lead to higher, more regular revenues and better capacity utilization. Customers with positive demand lead times place orders in advance of their needs, resulting in advance demand information. This gives rise to the problem of finding effective inventory control policies under advance demand informa...

W consider a newsvendor who dynamically updates her forecast of the market demand over a finite planning horizon. The forecast evolves according to the martingale model of forecast evolution (MMFE). The newsvendor can place multiple orders with increasing ordering cost over time to satisfy demand that realizes at the end of the planning horizon. In this context, we explore the trade-off between...

This paper considers a multistage serial inventory system with Markov-modulated demand. Random demand arises at Stage 1, Stage 1 orders from Stage 2, etc., and Stage N orders from an outside supplier with unlimited stock. The demand distribution in each period is determined by the current state of an exogenous Markov chain. Excess demand is backlogged. Linear holding costs are incurred at every...

We consider a supply chain consisting of one manufacturer (capacitated supplier) and two retailers. We characterize the manufacturer’s optimal production policy under selective-information sharing, in which the manufacturer receives demand and inventory information from only one of the two retailers. We show that the manufacturer’s optimal production policy is a state-dependent base-stock polic...