TY - JOUR
T1 - Inventory models with fixed costs, forecast updates, and two delivery modes
AU - Sethi, Suresh P.
AU - Yan, Houmin
AU - Zhang, Hanqin
PY - 2003/3
Y1 - 2003/3
N2 - This paper is concerned with a periodic review inventory system with fast and slow delivery modes, fixed ordering cost, and regular demand forecast updates. At the beginning of each period, on-hand inventory and demand information are updated. At the same time, decisions on how much to order using fast and slow delivery modes are made. Fast and slow orders are delivered at the end of the current period and at the end of the next period, respectively. A forecast-update-dependent (s, S)-type policy is shown to be optimal. Also shown are some monotonicity properties of the policy parameters with respect to the costs and information updates.
AB - This paper is concerned with a periodic review inventory system with fast and slow delivery modes, fixed ordering cost, and regular demand forecast updates. At the beginning of each period, on-hand inventory and demand information are updated. At the same time, decisions on how much to order using fast and slow delivery modes are made. Fast and slow orders are delivered at the end of the current period and at the end of the next period, respectively. A forecast-update-dependent (s, S)-type policy is shown to be optimal. Also shown are some monotonicity properties of the policy parameters with respect to the costs and information updates.
KW - Dynamic programming: optimality of (s, S)-type policies
KW - Forecasting: updating forecasts over time
KW - Inventory/production, stochastic: fix lost, multiple delivery modes, forecast updates
UR - http://www.scopus.com/inward/record.url?scp=4344631900&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-4344631900&origin=recordpage
U2 - 10.1287/opre.51.2.321.12777
DO - 10.1287/opre.51.2.321.12777
M3 - RGC 21 - Publication in refereed journal
SN - 0030-364X
VL - 51
JO - Operations Research
JF - Operations Research
IS - 2
ER -