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http://dx.doi.org/10.7232/JKIIE.2012.38.2.116

Joint Replenishment Policy for Items with Non-stationary Demands  

Yang, Young-Hyeon (Department of Information and Management Engineering, Hanyang University)
Kim, Jong-Soo (Department of Industrial and Management Engineering, Hanyang University, ERICA Campus)
Kim, Tai-Young (Department of Business Management, Dongyang Mirae University)
Publication Information
Journal of Korean Institute of Industrial Engineers / v.38, no.2, 2012 , pp. 116-124 More about this Journal
Abstract
This paper concerns a joint replenishment problem for a single buyer who sells multiple types of items to end-customers. The buyer periodically replenishes the inventory of each item to a preset order-up-to-level to satisfy the end customers' demands, which may be non-stationary. A joint replenishment policy characterized by variable order-up-to-levels is proposed for the buyer who wishes to minimize the expected cost of operating the retail system. The proposed policy starts each period by calculating the expected cost of ordering and not ordering action based on the information of the current inventory position and forecasted demand for the upcoming period. It then takes advantage of an integer programming model to get a cost effective joint replenishment plan. Computer experiment was performed to test efficiency of the proposed policy. When compared with the most efficient policy currently available, our policy showed a considerable cost savings especially for the problems having non-stationary demands.
Keywords
Inventory Control; Joint Replenishment Problem; Non-stationary Demand;
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