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Note: Optimal Policies for Serial Inventory Systems under Fill Rate Constraints

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Author

  • Sven Axsäter

Summary, in English

A continuous review serial production/distribution system with discrete compound Poisson demand for the end product is considered. Unmet demand is back-ordered. Production/transportation times are constant. All deliveries from one stage to the next must be multiples of given batch sizes. The problem of minimizing the holding costs under a fill rate constraint is considered. Using recent results by Chen (2000), it is shown that under a set of restricted but plausible assumptions, the optimal policy is an echelon stock multistage (R, nQ) policy with one of the reorder points varying over time. A simple procedure for the determination of the optimal policy is provided.

Publishing year

2003

Language

English

Pages

247-253

Publication/Series

Management Science

Volume

49

Issue

2

Document type

Journal article

Publisher

Informs

Topic

  • Transport Systems and Logistics

Keywords

  • Management science
  • Studies
  • Mathematical models
  • Inventory control
  • Optimization

Status

Published

ISBN/ISSN/Other

  • ISSN: 0025-1909