We consider the problem of allocating production capacity among multiple items, assuming that a fixed proportion of overall capacity can be dedicated exclusively to the production of each item. Given a capacity allocation, production of each item follows a base-stock policy, i.e., each demand triggers a replenishment order to restore safety stocks to target levels. We present procedures for cho...

The purpose of this paper is to extend [Ouyang, L. Y., Chuang, B. R. (2001). A periodic review inventory-control system with variable lead time. International Journal of Information and Management Sciences, 12, 1–13] periodic review inventory model with variable lead time by considering the fuzziness of expected demand shortage and backorder rate. We fuzzify the expected shortage quantity at th...

In partial backorder inventory system, when demand is not satisfied, unmet demand would be backordered partially. Either backorder or lost sales would make the cost increase. For a buyer, it is important to decide how much inventory should be prepared. A great deal of research efforts have been devoted to it over a few decades. Previous researches always assume that the lead time is fixed param...

The two critical factors distinguishing inventory management in a multifirm supply-chain context from the more traditional centrally planned perspective are incentive conflicts and information asymmetries. We study the well-known order quantity/reorder point (Q r) model in a two-player context, using a framework inspired by observations during a case study. We show how traditional allocations o...

This paper examines the relationship between distributor backorder performance and its inventory levels under Vendor Managed Inventory (VMI) in a supply chain that consists of distributors and manufacturers. We construct a principal-agent model to show that distributors' inventory managed by manufacturers can be used to induce distributor efforts, which are unobservable to the manufacturers, in...

After three decades’ development, revenue management has become an active area of research. Its idea is not only applied in the traditional service industries such as airline, hotel and car rental, but also in manufacturing industry. In this paper, we consider the application of revenue management to a demand fulfillment problem of a make-to-stock (MTS) system, where the manufacturer is facing ...

This paper considers that the number of defective units in an arrival order to be a binominal random variable. We derive a modified mixture inventory model with backorders and lost sales, in which the order quantity and lead time are decision variables. In our studies, we also assume that the backorder rate is dependent on the length of lead time through the amount of shortages and let the back...

A significant extension of the classic EOQ model is the assumption that realized demand decreases if customers are forced to backorder. To capture the way this decrease depends on the waiting time, different functional forms have been proposed, ranging from the simple (e.g., constant or linear forms) to the complex (e.g., exponential or rational forms.) This paper explores the question of wheth...

– This paper derives a good approach to approximating the expected inventory level per unit time for the continuous review perishable inventory system. Three existing approximation approaches are examined and compared with the proposed approach. Three stockout cases, including the full backorder, the partial backorder, and the full lost sales cases, which customers or material users generally u...

In this paper we study a periodic review inventory model with stock dependent demand. When stock on hand is zero, the inventory manager offers a price discount to customers who are willing to backorder their demand. Permissible delay in payments allowed to the inventory manager is also taken into account. Numerical examples are cited to illustrate the model.