In recent years, there has been an increasing adoption of returns policies in the coordination of the supply chain, where market demand is always assumed to be satisfied by manufacturing or by ordering from suppliers. However, many industries face the important decision of how to balance their inventory level. This problem has long been studied in financial institutions such as banks. This stud...

This paper presents a new formulation for warehouse inventory management in a stochastic situation. The primary source of this formulation is derived from FP model, which has been proposed by Fletcher and Ponnambalam for reservoir management. The new proposed mathematical model is based on the first and the second moments of storage as a stochastic variable. Using this model, the expected value...

We study a hybrid strategy that uses both process flexibility and inventory to mitigate risks of plant disruption. In this setting, a firm allocates inventory before disruption while facing demand uncertainties; demand is realized after disruption, and the firm schedules its production using process flexibility to minimize lost sales. This interplay between process flexibility and inventory is ...

This paper studies the computation of order up to levels for a stochastic programming inventory problem of a perishable product. Finding a solution is a challenge as the problem enhances a perishable product, fixed ordering cost and non-stationary stochastic demand with a service level constraint. An earlier study [6] derived order-up-to values via an MILP approximation. We consider a computati...

In this paper, we consider a dynamic stochastic inventory model with fixed inventory holding and shortage costs in addition to a fixed ordering cost. WE discuss a sufficient and necessary condition for an (s,S) policy to be optimal in the class of such stochastic inventory models. Furthermore, we explore how such a sufficient and necessary condition can be rewritten when the demand distribution...

We consider a multi-product serial two echelon inventory system with stochastic demand. Inventories at the downstream location are replenished periodically using an automatic ordering system. Under vendor managed inventory strategies the upstream stage is allowed to adapt these orders in order to benefit from economies of scale. We propose three different VMI strategies, aiming to reduce the or...

In this project, we formulate a Stochastic optimization framework to manage the risk from input uncertainty in inventory management. In the classical inventory management, the stochastic programming is used to find an optimal policy that optimizes the risk-neutral expected cost over a certain planning horizon [3], or the risk from the randomness of the demand [7]. However, to the best of our kn...

The need for integration in supply chain management leads us to consider the coordination of two logistic planning functions: transportation and inventory. The coordination of these activities can be an extremely important source of competitive advantage in supply chain management. The battle for cost reduction can involve finding the equilibrium between transportation and inventory management ...

An inventory manager is typically concerned with a number of diierent products. His decision-making task is made complicated by such factors as interdependent uncertain product demands and competition for limited storage space. The stochastic inventory problem involving these complexities cannot in general be decomposed into a number of distinct single product problems. In the paper \Stochastic...

We compare how freshmen business students, graduate business students and experienced procurement managers perform on a simple inventory ordering task. We find that, qualitatively, managers exhibit ordering behavior similar to students, including biased ordering towards average demand. Experience, however, affects subjects’ utilization of information. The managers’ work experience seems most va...