Journal of Korean Institute of Industrial Engineers (대한산업공학회지)

Korean Institute of Industrial Engineers (대한산업공학회)
권호 표지

A Sensitivity Analysis of the Optimal Inventory Control for a Vertically Integrated Supply Chain

수직적으로 통합된 공급사슬을 위한 최적 재고 정책의 민감도 분석

  • Kim, Engab (College of Business Administration, Ewha Womans University)
  • 김은갑 (이화여자대학교 경영대학)
  • Published : 2004.09.30
Download PDF
⟨ Previous Next ⟩

Abstract

This paper deals with a supply chain with a company and its contractor that produces products by the OEM contract with the company. The supply chain of interest has two distinct features. First, the company is the supplier of raw material required in the production at the contractor. Second, the company and its contractor make a delivery shipment arrangement that the replenishment lead time is determined depending on demand process. We show that the optimal inventory policy is monotonically changed as either the replenishment setup cost or inventory holding cost becomes increased or decreased. We also present asymptotic properties of the optimal inventory policy when either the number of outstanding customer orders or the inventory level becomes very large.

Keywords

References

  1. Axsater, S. (1993), Exact and approximate evaluation of batch-ordering policies for two-level inventory systems, Operations Research 41, 777-785
  2. Bertsekas, D.P. (1987), Dynamic Programming: Deterministic and Stochastic Models, Prentice-Hall, Englewood Cliffs, NJ
  3. Carr, S., and Duenyas, J. (2000), Optimal Admission Control and Sequencing in a Make-To- Stock/Make-To-Order Production System, Operations Research 48, 709-720
  4. Fry, MJ., Kapuscinski, R., and Olsen, T. (2001) Coordinating Production and Delivery Undera (z,Z)-type Vendor Managed Inventory Contract, M&SOM 3 (2) 151-173
  5. Ha, A.Y. (1997), Optimal dynamic scheduling policy for a make-to-stock production system, Operations Research 45 (1), 42-53 https://doi.org/10.1287/opre.45.1.42
  6. He, Q., Jewkes, E.M., and Buzacott, J. (2002), The value of information used in inventory control of a make-to-order inventory-production system, IIE Transactions 34, 999-1013
  7. Kim, E. (2004), Stochastic vendor managed inventory with demand dependent shipment, European Journal of Operational Research 152(3), 723-744
  8. Koole, G. (1997) Assigning a single server to inhomogeneous queues with switching costs, Theoretical Computer Science 182, 203-216
  9. The national Academy of Sciences (1999), Surviving supply chain integraion: Strategies for small manufacturers, National Academy Press
  10. Simchi-Levi, D., Kaminsky, P., and Simchi-Levi, E. (2000), Designing andmanaging the suply chain: Concepts, Strategies, and Case Studies, McGraw-Hill
  11. Silver, E.A. and Peterson, R. (1985), Decision systems for inventory management and production planning, New York: John Wiley and Sons
  12. Van Oyen, M.P., (1997), Monotonicity of Optimal Performance Measures for Polling Systems, Probability in the Engineering and Informational Sciences 11(2), 219-228