Service Level Constrained Inventory Systems

Service Level Constrained Inventory Systems
Author: Yuchen Jiang
Publisher:
Total Pages: 40
Release: 2019
Genre:
ISBN:

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Motivated by the importance of service quality in nowadays customer business environment, we focus on inventory optimization under probabilistic service level constraints, namely, the alpha service level (also known as the ready rate) or the beta service level (also known as the fill rate). Under service level constraints, we consider two canonical stochastic inventory models: (i) the classical inventory control model with backlogging and (ii) the remanufacturing inventory control model with random product returns. The random demands could be nonstationary, evolving and correlated over time. For each model, we first establish the optimality of generalized base-stock policies, and then propose a new approximation algorithm that admits a worst-case performance guarantee of 2. The core concept developed in this paper is called the delayed forced holding and production cost, which is proven effective in dealing with service level constrained inventory systems. We also provide an efficient heuristic algorithm for the multi-item inventory system. Our extensive computational experiments show that the proposed algorithms perform within 2% of optimality.

On a Deterministic Approximation of Inventory Systems with Sequential Service Level Constraints

On a Deterministic Approximation of Inventory Systems with Sequential Service Level Constraints
Author: Lai Wei
Publisher:
Total Pages: 65
Release: 2020
Genre:
ISBN:

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Service level constraint is often used as a metric to directly control the quality of service (e.g., managing the probability of stock-out) in practice. Many inventory problems with service level constraints are often difficult to solve and are typically approximated by deterministic formulations. This raises an important question regarding the quality of such an approach. To shed light on this question, in this paper, we consider two simplified yet fundamental inventory models (with backorder and lost-sales) with independent demands, positive lead times and sequential probabilistic service level constraints, and study the performance of a natural order-up-to policy whose parameters can be calculated using the optimal solution of a deterministic approximation of the backorder inventory system. We show that it is asymptotically optimal for both the backorder and lost-sales systems in the setting with a high service level requirement, with a stronger performance bound for the backorder system. Our analysis for the lost-sales system involves a construction of an alternative backorder system whose expected total cost can be related to that of the analogous lost-sales system. Overall, our result contributes to the growing body of inventory literature that suggests the near-optimality of simple heuristic policies. Moreover, it also gives credence to the use of deterministic approximation for solving complex inventory problems in practice, at least for applications where the targeted service level is sufficiently high.

Imperfect Inventory Systems

Imperfect Inventory Systems
Author: Ata Allah Taleizadeh
Publisher: Springer Nature
Total Pages: 595
Release: 2021-02-19
Genre: Business & Economics
ISBN: 3030569748

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This book examines inventory and production strategies that can reduce unexpected breakdown costs. It highlights different EPQ models to deal with such problems, providing optimal value derivations for decision variables. It provides proofs for concavity or convexity of objective functions. The chapters also include numerical examples for all the developed mathematical models. Imperfect Inventory Systems: Inventory and Production Management and Breakdown should be useful for professionals working on supply chains, but also researchers in operations research and inventory management.

Periodic Review Inventory Systems

Periodic Review Inventory Systems
Author: Thomas Wensing
Publisher: Springer Science & Business Media
Total Pages: 159
Release: 2011-06-26
Genre: Business & Economics
ISBN: 3642204791

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The focus of the work is twofold. First, it provides an introduction into fundamental structural and behavioral aspects of periodic review inventory systems. Second, it includes a comprehensive study on analytical and optimization aspects of a specific class of those systems. For the latter purpose, general solution methods for problems of inventory management in discrete time are described and developed along with highly specialized methods to solve very specific problems related to the model variants examined. The work is thus addressed to students and practitioners who seek a deeper understanding of managing inventories in discrete time as well as to software developers who require implementation aids on specific problems of inventory management.

Handbook of Stochastic Models and Analysis of Manufacturing System Operations

Handbook of Stochastic Models and Analysis of Manufacturing System Operations
Author: J. MacGregor Smith
Publisher: Springer Science & Business Media
Total Pages: 397
Release: 2013-05-17
Genre: Business & Economics
ISBN: 1461467772

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This handbook surveys important stochastic problems and models in manufacturing system operations and their stochastic analysis. Using analytical models to design and control manufacturing systems and their operations entail critical stochastic performance analysis as well as integrated optimization models of these systems. Topics deal with the areas of facilities planning, transportation, and material handling systems, logistics and supply chain management, and integrated productivity and quality models covering: • Stochastic modeling and analysis of manufacturing systems • Design, analysis, and optimization of manufacturing systems • Facilities planning, transportation, and material handling systems analysis • Production planning, scheduling systems, management, and control • Analytical approaches to logistics and supply chain management • Integrated productivity and quality models, and their analysis • Literature surveys of issues relevant in manufacturing systems • Case studies of manufacturing system operations and analysis Today’s manufacturing system operations are becoming increasingly complex. Advanced knowledge of best practices for treating these problems is not always well known. The purpose of the book is to create a foundation for the development of stochastic models and their analysis in manufacturing system operations. Given the handbook nature of the volume, introducing basic principles, concepts, and algorithms for treating these problems and their solutions is the main intent of this handbook. Readers unfamiliar with these research areas will be able to find a research foundation for studying these problems and systems.

Principles and Practice of Constraint Programming

Principles and Practice of Constraint Programming
Author: Peter J. Stuckey
Publisher: Springer Science & Business Media
Total Pages: 662
Release: 2008-08-28
Genre: Computers
ISBN: 3540859578

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This volume contains the proceedings of the 14th International Conference on Principles and Practice of Constraint Programming (CP 2008) held in Sydney, Australia, September 14–18, 2008. The conference was held in conjunction with the International Conference on Automated Planning and Scheduling (ICAPS 2008) and the International Conference on Knowledge Representation and R- soning (KR 2008). Information about the conference can be found at the w- sitehttp://www. unimelb. edu. au/cp2008/. Held annually, the CP conference series is the premier international conference on constraint programming. The conference focuses on all aspects of computing with constraints. The CP conf- ence series is organized by the Association for Constraint Programming (ACP). Information about the conferences in the series can be found on the Web at http://www. cs. ualberta. ca/~ai/cp/. Information about ACP can be found athttp://www. a4cp. org/. CP 2008 included two calls for contributions: a call for research papers, - scribing novel contributions in the ?eld, and a call for application papers, - scribing applications of constraint technology. For the ?rst time authors could directly submit short papers for consideration by the committee. The research track received 84 long submissions and 21 short submissions and the application track received 15 long submissions. Each paper received at least three reviews, which the authors had the opportunity to see and to react to, before the papers and their reviews were discussed extensively by the members of the Program Committee.

Spare Parts Inventory Control under System Availability Constraints

Spare Parts Inventory Control under System Availability Constraints
Author: Geert-Jan van Houtum
Publisher: Springer
Total Pages: 227
Release: 2015-05-18
Genre: Business & Economics
ISBN: 1489976094

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This book focuses on the tactical planning level for spare parts management. It describes a series of multi-item inventory models and presents exact and heuristic optimization methods, including greedy heuristics that work well for real, life-sized problems. The intended audience consists of graduate students, starting scholars in the field of spare parts inventory control, and spare parts planning specialists in the industry. In individual chapters the authors consider topics including: a basic single-location model; single-location models with multiple machine types and/or machine groups; the multi-location model with lateral transshipments; the classical METRIC model and its generalization to multi-indenture systems; and a single-location model with an explicit modeling of the repair capacity for failed parts and the priorities that one can set there. Various chapters of the book are used in a master course at Eindhoven University of Technology and in a PhD course of the Graduate Program Operations Management and Logistics (a Dutch network that organizes PhD courses in the field of OM&L). The required pre-knowledge consists of probability theory and basic knowledge of Markov processes and queuing theory. End-of-chapter problems appear for all chapters, with some answers appearing in an appendix.

Analysis and Algorithms for Service Parts Supply Chains

Analysis and Algorithms for Service Parts Supply Chains
Author: John A. Muckstadt
Publisher: Springer Science & Business Media
Total Pages: 290
Release: 2006-12-26
Genre: Business & Economics
ISBN: 0387272887

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* Provides a broad overview of modeling approaches and solution methodologies for addressing inventory problems, particularly the management of high cost, low demand rate service parts found in multi-echelon settings * The text may be used in a variety of courses for first-year graduate students or senior undergraduates, or as a reference for researchers and practitioners * A background in stochastic processes and optimization is assumed

Inventory and Production Management in Supply Chains

Inventory and Production Management in Supply Chains
Author: Edward A. Silver
Publisher: CRC Press
Total Pages: 810
Release: 2016-12-19
Genre: Business & Economics
ISBN: 1466558628

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Authored by a team of experts, the new edition of this bestseller presents practical techniques for managing inventory and production throughout supply chains. It covers the current context of inventory and production management, replenishment systems for managing individual inventories within a firm, managing inventory in multiple locations and firms, and production management. The book presents sophisticated concepts and solutions with an eye towards today’s economy of global demand, cost-saving, and rapid cycles. It explains how to decrease working capital and how to deal with coordinating chains across boundaries.