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Article: Incorporating a delay mechanism in ordering policies into multi-echelon distribution systems

TitleIncorporating a delay mechanism in ordering policies into multi-echelon distribution systems
Authors
KeywordsInventory management
Multi-echelon distribution system
Non-Poisson demand
Order delay
Issue Date2008
PublisherTaylor & Francis Inc. The Journal's web site is located at http://www.tandf.co.uk/journals/titles/0740817x.asp
Citation
Iie Transactions (Institute Of Industrial Engineers), 2008, v. 40 n. 4, p. 445-458 How to Cite?
AbstractIn this paper, we devise a framework for obtaining the optimal ordering policy in a single location, continuous-review inventory system with arbitrary inter-demand times. We show that it is optimal to order at demand arrival epochs only if the inter-demand time has a constant or decreasing failure rate. When the inter-demand time has an increasing failure rate, we show that the optimal policy is to delay the order. We then extend this policy to multi-echelon distribution systems consisting of one supplier and many retailers. Both decentralized and centralized systems are considered. We derive expressions and procedures for the evaluation of the total cost and the computation of optimal delay in all the considered settings. More importantly, we study the impact of our delay policy in all the settings. The numerical results indicate that for the single-location model, the optimal delay can significantly reduce the total cost. Results from the single-location model can be applied to the decentralized multi-echelon system, where the upstream supplier acts as a single-location system. The supplier order delay can also have a significant impact (either positive or negative) on the retailers' total cost as well as the system's total costs. Finally, the impact of supplier order delay is minimal in the centralized multi-echelon setting. We offer an intuitive explanation for this observation.
Persistent Identifierhttp://hdl.handle.net/10722/157730
ISSN
2015 Impact Factor: 1.463
2015 SCImago Journal Rankings: 1.293
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorMoinzadeh, Ken_HK
dc.contributor.authorZhou, YPen_HK
dc.date.accessioned2012-08-08T08:55:12Z-
dc.date.available2012-08-08T08:55:12Z-
dc.date.issued2008en_HK
dc.identifier.citationIie Transactions (Institute Of Industrial Engineers), 2008, v. 40 n. 4, p. 445-458en_HK
dc.identifier.issn0740-817Xen_HK
dc.identifier.urihttp://hdl.handle.net/10722/157730-
dc.description.abstractIn this paper, we devise a framework for obtaining the optimal ordering policy in a single location, continuous-review inventory system with arbitrary inter-demand times. We show that it is optimal to order at demand arrival epochs only if the inter-demand time has a constant or decreasing failure rate. When the inter-demand time has an increasing failure rate, we show that the optimal policy is to delay the order. We then extend this policy to multi-echelon distribution systems consisting of one supplier and many retailers. Both decentralized and centralized systems are considered. We derive expressions and procedures for the evaluation of the total cost and the computation of optimal delay in all the considered settings. More importantly, we study the impact of our delay policy in all the settings. The numerical results indicate that for the single-location model, the optimal delay can significantly reduce the total cost. Results from the single-location model can be applied to the decentralized multi-echelon system, where the upstream supplier acts as a single-location system. The supplier order delay can also have a significant impact (either positive or negative) on the retailers' total cost as well as the system's total costs. Finally, the impact of supplier order delay is minimal in the centralized multi-echelon setting. We offer an intuitive explanation for this observation.en_HK
dc.languageengen_US
dc.publisherTaylor & Francis Inc. The Journal's web site is located at http://www.tandf.co.uk/journals/titles/0740817x.aspen_HK
dc.relation.ispartofIIE Transactions (Institute of Industrial Engineers)en_HK
dc.subjectInventory managementen_HK
dc.subjectMulti-echelon distribution systemen_HK
dc.subjectNon-Poisson demanden_HK
dc.subjectOrder delayen_HK
dc.titleIncorporating a delay mechanism in ordering policies into multi-echelon distribution systemsen_HK
dc.typeArticleen_HK
dc.identifier.emailZhou, YP: yongpin@hku.hken_HK
dc.identifier.authorityZhou, YP=rp01614en_HK
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1080/07408170701416640en_HK
dc.identifier.scopuseid_2-s2.0-39049095379en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-39049095379&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume40en_HK
dc.identifier.issue4en_HK
dc.identifier.spage445en_HK
dc.identifier.epage458en_HK
dc.identifier.isiWOS:000253228500007-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridMoinzadeh, K=6701361952en_HK
dc.identifier.scopusauthoridZhou, YP=9037956000en_HK

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