A Production-Inventory System with Markovian Capacity and Outsourcing Option

Yang, Jian; Qi, Xiangtong; Xia, Yusen

doi:10.1287/opre.1040.0165

Cited by 72 publications

(44 citation statements)

References 35 publications

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“…The differences are the existence of several subcontracting opportunities with different cost and capacity structures and the demand being dependent on the lead time distribution during out-of-stock periods. Yang et al (2005) deal with a production/inventory system under uncertain capacity levels and the existence of outsourcing opportunities. In their model, there is no fixed cost of production but a fixed cost is associated with outsourcing.…”

Section: Related Literaturementioning

confidence: 99%

An integrated approach to inventory and flexible capacity management subject to fixed costs and non-stationary stochastic demand

Tan

Alp

2008

OR Spectrum

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In a manufacturing system with flexible capacity, inventory management can be coupled with capacity management in order to handle fluctuations in demand more effectively. Typical examples include the effective use of temporary workforce and overtime production. In this paper, we discuss an integrated model for inventory and flexible capacity management under non-stationary stochastic demand with the possibility of positive fixed costs, both for initiating production and for using contingent capacity. We analyze the characteristics of the optimal policies for the integrated problem. We also evaluate the value of utilizing flexible capacity under different settings, which enable us to develop managerial insights.

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Section: Related Literaturementioning

confidence: 99%

An integrated approach to inventory and flexible capacity management subject to fixed costs and non-stationary stochastic demand

Tan

Alp

2008

OR Spectrum

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“…Because g 0 I 1 I 2 = 0, we can use a sample-path argument (a more elaborate reasoning process may be found in the similar proof of Theorem 6 in Yang et al 2005) to arrive at…”

Section: Extension To the Infinite-horizon Casementioning

confidence: 99%

Capacitated Production Control with Virtual Lateral Transshipments

Yang

Qin

2007

Operations Research

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We study the optimal control of a firm with two capacitated manufacturing plants situated in two distinct geographical regions. Demands from each region are mostly satisfied by the local plant. However, if necessary, some of the newly arrived demands can be designated to be served by the other, more remote, plant. The sources of the above virtual lateral transshipments, unlike the ones involved in the real lateral transshipments, do not need to have nonnegative inventory levels throughout the transshipment processes. We develop results about the simultaneous preservation of supermodularity and diagonal dominances of the cost functions and then use these results to derive structural results for the optimal policies. Specifically, to perform optimally, we find that each plant should adopt a modified base-stock policy in observance of its own capacity, while the base level should mildly decrease in the other plant's starting inventory level. Our computational results illustrate the benefits realizable by using transshipment.

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“…They provided polynomial time algorithms for a large variety of cost functions. [23] dealt with a production/inventory system under uncertain capacity levels and the existence of outsourcing opportunities. In their model, outsourcing was associated with a fixed cost, whereas production was not.…”

Section: Literature Reviewmentioning

confidence: 99%

Perishable Inventory Management in Healthcare

Perlman‬‏¹,

Levner²

2014

JSSM

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This study addresses a problem encountered in a nation-wide, large-scale healthcare supply chain that comprises several hundred medical organizations (hospitals, clinics, pharmacies, etc.) and provides highly advanced medical care to several million people. The medical products in the system are perishable, meaning that they become unusable beyond a certain expiry date. It is necessary to track the ages of units in stock and to plan and control the inventory accordingly. The models developed herein represent a multi-echelon, multi-supplier inventory system and unite together aspects of perishability and outsourcing under deterministic demand for medical products, which include both perishable and deteriorating goods. The objective of the study is to determine the optimal number of products to be purchased from regular and outsource suppliers so as to meet the required demand at the minimum operating cost. The solution is a network-flow model that can be used to determine the trade-off between the quantities of items to be ordered from the two types of suppliers in each time period. In addition, the study analyzes different distribution policies to account for the perishable nature of the products. Further insights are obtained by applying the model to a case study of a real-life healthcare supply chain from which interesting results are drawn.

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A Production-Inventory System with Markovian Capacity and Outsourcing Option

Cited by 72 publications

References 35 publications

An integrated approach to inventory and flexible capacity management subject to fixed costs and non-stationary stochastic demand

An integrated approach to inventory and flexible capacity management subject to fixed costs and non-stationary stochastic demand

Capacitated Production Control with Virtual Lateral Transshipments

Perishable Inventory Management in Healthcare

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