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...

This paper develops a mathematical model in dynamic virtual cellular manufacturing systems with the multiperiod cell formation problem, production planning, dynamic virtual system reconfiguration and training workers. Since workers have important role in doing jobs on machines, assignment of workers to cells becomes a crucial factor in cellular manufacturing system. Also we have shown the role ...

This paper discusses multiproduct aggregate production planning (APP) decision making problems in fuzzy random environments. To maximize the chance of obtaining the profit more than the predetermined profit over the whole planning horizon, a fuzzy random APP model is established, in which the market demand, production cost, subcontracting cost, inventory carrying cost, backorder cost, product c...

In this paper, we studied single-server models of queuing-inventory systems (QIS) with catastrophes in the warehouse part and negative customers (n-customers) service facility. Consumer (c-customers) that arrived to buy inventory can be queued an infinite buffer. Under catastrophes, all system is destroyed but (on server or buffer) are still waiting for replenishment stocks. Upon arrival n-cust...

We develop bounds and approximations for setting base-stock levels in production-inventory systems with limited production capacity. Our approximations become exact as inventories become critical, meaning either that the target service level is very high or the backorder penalty is very large. Our bounds apply even without this requirement. We consider both single-stage and multi-stage systems....

Manufacturers and wholesalers are increasingly cost conscious in response to today’s hyper-competitive environment. Lateral transshipment (LT) has been proposed as a viable solution to drive total inventory costs down whilst increasing customer service level. Our study proposes five LT decision rules with a case-based roadmap to guide professional inventory management. Results of this large fas...

This paper develops economic production quantity (EPQ)-based models with planned backorders to evaluate the impact of the postponement strategy on a manufacturer in a supply chain. We derive the optimal total average costs per unit time for producing and keeping n end-products in a postponement system and a nonpostponement system, respectively. By comparing the optimal total average costs of th...

Inventory control is important in supply chain management. A great deal of research efforts have been devoted to it over a few decades. Previous researches always assume that the lead time is an exogenously parameter, and the unmet demand is backordered. However, these assumptions may not suit to the real environment. In this paper, a mathematical model regarding inventory control is set up for...

We examine the component procurement problem in a single-item, make-to-stock assembly system. The suppliers are uncapacitated and have independent but non-identically distributed stochastic delivery lead times. Assembly is instantaneous, product demand follows a Poisson process and unsatisfied demand is backordered. The objective is to minimize the sum of steady-state holding and backorder cost...