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Vendor's optimal inventory policy with dynamic and discrete demands in an infinite time horizon

Afzalabadi, M ; Sharif University of Technology | 2016

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  1. Type of Document: Article
  2. DOI: 10.1016/j.cie.2016.06.024
  3. Publisher: Elsevier Ltd , 2016
  4. Abstract:
  5. Although inventory control under discrete demand in dynamic quantities and time intervals are very common in reality, existing literature has largely ignored them. In this paper, we investigate the inventory control decisions in a two echelon supply chain consisting of one vendor and several retailers. The vendor supplies a product to several retailers, who buy discrete quantities in pre-determined time intervals. The order quantity and order cycles for each retailer can be different from others. Vendor orders the required quantity from supplier and it will be immediately received at the vendor's warehouse. In this system, shortage is not allowed for the vendor. The transportation time from the supplier to the vendor is assumed to be zero and the supplier has enough stock that would never face shortages. We have developed a new efficient, greedy algorithm to find the optimal ordering policy involving the scheduling and the order quantity of vendor to his supplier to minimize his cost function over an infinite time horizon
  6. Keywords:
  7. Discrete time ; Dynamic demand ; Infinite time horizon ; Inventory control ; Cost functions ; Sales ; Supply chains ; Discrete time ; Dynamic demand ; Greedy algorithms ; Infinite time horizon ; Inventory policies ; Optimal ordering policy ; Transportation time ; Two-echelon supply chain ; Inventory control
  8. Source: Computers and Industrial Engineering ; Volume 102 , 2016 , Pages 368-373 ; 03608352 (ISSN)
  9. URL: http://www.sciencedirect.com/science/article/pii/S0360835216302194?via%3Dihub