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|Title:||Near-optimal (r,Q) policies for a two-stage serial inventory system with Poisson demand|
|Citation:||Yang, L., Yang, J., Yu, G., Zhang, H. (2011). Near-optimal (r,Q) policies for a two-stage serial inventory system with Poisson demand. International Journal of Production Economics 133 (2) : 728-735. ScholarBank@NUS Repository. https://doi.org/10.1016/j.ijpe.2011.03.030|
|Abstract:||We consider a two-stage serial inventory system whose cost structure exhibits economies of scale in both stages. In the system, stage 1 faces Poisson demand and replenishes its inventory from stage 2, and the latter stage in turn orders from an outside supplier with unlimited stock. Each shipment, either to stage 2 or to stage 1, incurs a fixed setup cost. We derive important properties for a given echelon-stock (r, Q) policy for an approximation of the problem where all states are continuous. Based on these properties, we design a simple heuristic algorithm that can be used to find a near-optimal (r, Q) policy for the original problem. Numerical examples are given to demonstrate the effectiveness of the algorithm. © 2011 Elsevier B.V. All right reserved.|
|Source Title:||International Journal of Production Economics|
|Appears in Collections:||Staff Publications|
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