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An improved decision rule for emergency replenishments

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  • Axsäter, Sven

Abstract

This paper provides a new decision rule for emergency replenishments in an inventory system. The decision rule is a generalization of a previous decision rule suggested and evaluated in Axsäter (2003, 2007). An improvement step is added to this rule and this often means considerably better performance. The decisions are based on complete information about the system state. An advantage with our decision rule is its generality. It is possible to handle batch ordering, compound Poisson demand and emergency replenishments that take time. The decision rule has also a performance guarantee in the sense that emergency replenishments will always lead to lower expected costs. The rule can also be used in connection with lateral transshipments.

Suggested Citation

  • Axsäter, Sven, 2014. "An improved decision rule for emergency replenishments," International Journal of Production Economics, Elsevier, vol. 157(C), pages 313-317.
    • Handle: RePEc:eee:proeco:v:157:y:2014:i:c:p:313-317
    DOI: 10.1016/j.ijpe.2014.01.021
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    References listed on IDEAS

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    1. Sven Axsäter & Christian Howard & Johan Marklund, 2013. "A distribution inventory model with transshipments from a support warehouse," IISE Transactions, Taylor & Francis Journals, vol. 45(3), pages 309-322.
    2. Yang, Guangyuan & Dekker, Rommert & Gabor, Adriana F. & Axsäter, Sven, 2013. "Service parts inventory control with lateral transshipment and pipeline stockflexibility," International Journal of Production Economics, Elsevier, vol. 142(2), pages 278-289.
    3. Paterson, Colin & Kiesmüller, Gudrun & Teunter, Ruud & Glazebrook, Kevin, 2011. "Inventory models with lateral transshipments: A review," European Journal of Operational Research, Elsevier, vol. 210(2), pages 125-136, April.
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    5. repec:dgr:rugsom:10006 is not listed on IDEAS
    6. Kamran Moinzadeh & Steven Nahmias, 1988. "A Continuous Review Model for an Inventory System with Two Supply Modes," Management Science, INFORMS, vol. 34(6), pages 761-773, June.
    7. Minner, Stefan, 2003. "Multiple-supplier inventory models in supply chain management: A review," International Journal of Production Economics, Elsevier, vol. 81(1), pages 265-279, January.
    8. Johansen, Soren Glud & Thorstenson, Anders, 1998. "An inventory model with Poisson demands and emergency orders," International Journal of Production Economics, Elsevier, vol. 56(1), pages 275-289, September.
    9. Huang, Shuo & Axsäter, Sven & Dou, Yifan & Chen, Jian, 2011. "A real-time decision rule for an inventory system with committed service time and emergency orders," European Journal of Operational Research, Elsevier, vol. 215(1), pages 70-79, November.
    10. Teunter, Ruud & Paterson, Colin & Glazebrook, K., 2010. "Hybrid Lateral Transshipments in a Multi-Location Inventory System," Research Report 10006, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
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