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...

[1] Corresponding author e-mail: [email protected]   [1] Corresponding author e-mail: [email protected]   Lot-sizing problems (LSPs) belong to the class of production planning problems in which the availability quantities of the production plan are always considered as a decision variable. This paper aims at developing a new mathematical model for the multi-level ca...

In most cases safety stock is determined based on the variability of the demand and lead time. The focus has been on the statistics and past performance, and the existing frameworks are not taking into account future development. Therefore we want to turn more to the future issues and develop the existing frameworks by implementing future factors to the decision making process. In this paper, t...

In the petrochemical, chemical and pharmaceutical industries, supply chains typically consist of multiple stages of production facilities, warehouse/distribution centers, logistical subnetworks and end customers. Supply chain performance in the face of variousmarket and technical uncertainties is usuallymeasured by service level, that is, the expected fraction of demand that the supply chain ca...

We study a new class of problems – recurrent projects with random material delays, at the interface between project and supply chain management. Recurrent projects are those similar in schedule and material requirements. We present the model of project-driven supply chain (PDSC) to jointly optimize the safety-stock decisions in material supply chains and the crashing decisions in projects. We p...

Model Predictive Control (MPC) is shown to provide a robust, flexible framework to stabilize inventories yet still meet customer demand with minimal safety stock. The translation of available information in the supply chain problem into MPC variables is demonstrated with a two-node supply chain example. A six-node, two-product, threeechelon demand network simulation proposed by Intel Corp. is w...

Foreknowledge of demand is useful in the control of a production-inventory system. Knowing the customer orders in advance makes it possible to anticipate properly. It is an important condition to produce and deliver the right quantity of the right product “just-in-time”. It reduces the need of safety stock and spare capacity. But the question of the effectiveness of foreknowledge is not an easy...

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...

The profession has been longing for closed-form solutions to consumption functions under uncertainty and borrowing constraints. This paper proposes an analytical approach to solving general-equilibrium bu¤er-stock saving models with both idiosyncratic and aggregate uncertainties as well as liquidity constraints. It is shown analytically that an individual’s optimal consumption plan follows the ...