Periodic-review inventory systems with random yield and demand: Bounds and heuristics

Li, Qing; Xu, He; Zheng, Shaohui

doi:10.1080/07408170701598108

Cited by 27 publications

(12 citation statements)

References 11 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In the inventory literature, a well‐known phenomenon is called horizon effect : more inventory should be stocked if the remaining planning horizon is longer. This is because a longer horizon allows one more time to collect proceeds and as such, more inventory is needed (DeGroot, 2004; Heyman & Sobel, 1984; Li, Xu, & Zheng, 2008). In our setting, this result no longer holds because the horizon effect and the stockpiling effect may drive the inventory level toward opposite directions.…”

Section: Structure Of the Optimal Policymentioning

confidence: 99%

Multiseason production planning under export quotas

Chen

Gong

et al. 2020

Naval Research Logistics

Self Cite

View full text Add to dashboard Cite

An export quota is a direct restriction on the quantity of certain goods that can be exported and is an important instrument in international trade policy. In this study, we focus on an exporting firm and examine the implication of export quotas on its production and inventory policies. In particular, the firm applies for an exporting license every season (eg, year) and the amount it can sell is unknown for certainty in advance. The firm must determine its production quantity every period (eg, month) under a production capacity constraint. The presence of quotas decouples inventory from sales: the firm can sell its goods if and only if the quota permits, and this changes the way it manages its production and inventory. We show that the firm in general benefits from stockpiling—produce up to an inventory level higher than current quota. Stockpiling happens if and only if the remaining quota for the current season is smaller than a threshold value. It is more likely to happen when it is closer to the end of a season or when the quotas in future seasons are larger. Although the inventory in excess of current quota cannot be used to fill the demand in the current season, they will be needed in future seasons when new quotas are released and the firm cannot increase production quickly enough due to capacity constraints. Our numerical studies show that the cost of limiting production only to current quota can be substantial.

show abstract

Section: Structure Of the Optimal Policymentioning

confidence: 99%

Multiseason production planning under export quotas

Chen

Gong

et al. 2020

Naval Research Logistics

Self Cite

View full text Add to dashboard Cite

show abstract

“…Yield uncertainty has drawn extensive attention in inventory management research in the past several decades. There are three types of random yield that have been considered in the literature: binomial yield [11], stochastically proportional yield [7,1,4,10,13,8,11] and interrupted geometric yield [11]. Binomial yield is used when failures of different units in a batch are uncorrelated and occur with the same probability.…”

Section: Literature Reviewmentioning

confidence: 99%

“…They therefore propose several myopic heuristics. [13] finds upper and lower bounds for the optimal reorder point and order quantity in an infinite-horizon model and gives valuable insights into the structure of the optimal policies.…”

Section: Literature Reviewmentioning

confidence: 99%

Approximate Order-Up-To Policies for Inventory Systems with Binomial Yield

Ju¹,

Gabor²,

Ommeren³

2014

SSRN Journal

View full text Add to dashboard Cite

This paper studies an inventory policy for a retailer who orders his products from a supplier whose deliveries only partially satisfy the quality requirements. We model this situation by an infinite-horizon periodic-review model with binomial random yield and positive lead time. We propose an orderup-to policy based on approximating the inventory model with unreliable supplier by a model with a reliable supplier and suitably modified demand distribution. The performance of the order-up-to policy is verified by comparing it with both the optimal policy and the safety stock policy proposed in [11]. Further, we extend our approximation to a dual sourcing model with one slow, unreliable and one fast, fully reliable supplier. Compared to the dual-index order-up-to policy for the model with full information on the yield, the proposed approximation gives promising results.

show abstract

“…Li et al [15] discuss on infinite horizon decision problem in a single-stage, single-item, periodic review system. Production yield and demand are uncertain in the system.…”

Section: Studies On Production Yieldmentioning

confidence: 99%

Tactical inventory and backorder decisions for systems with predictable production yield

Mart

Duran

Bakal

2013

International Journal of Production Economics

View full text Add to dashboard Cite

pagesWe consider a manufacturing system with stochastic demand and predictable production yield. The manufacturer has predetermined prices and limited production capacity in each period. The producer also has the option to save some inventory for future periods even if there is demand in the current period. The demand that is not met is lost or may be backordered for only one period. Our objective is to maximize the expected profit by choosing optimal production, save and backorder quantities in each period. We formulate this problem as a Markov Decision Process where the state of the system is represented by the net inventory and the efficiency parameter. We show that a modified (Y, S , B) policy is optimal in each period. At the end, we have some computational analysis to examine the effects of yield on the optimal decisions.

show abstract

Periodic-review inventory systems with random yield and demand: Bounds and heuristics

Cited by 27 publications

References 11 publications

Multiseason production planning under export quotas

Multiseason production planning under export quotas

Approximate Order-Up-To Policies for Inventory Systems with Binomial Yield

Tactical inventory and backorder decisions for systems with predictable production yield

Contact Info

Product

Resources

About