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Technical Note ---Capacitated Serial Inventory Systems: Sample Path and Stability Properties Under Base-Stock Policies

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  • Woonghee Tim Huh

    (Operations and Logistics Division, Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada)

  • Ganesh Janakiraman

    (School of Management, The University of Texas at Dallas, Richardson, Texas 75080-3021)

  • Mahesh Nagarajan

    (Operations and Logistics Division, Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada)

Abstract

We study a periodically reviewed multiechelon serial inventory system with a capacity constraint on the order quantity at every stage. Under echelon base-stock policies, we demonstrate a simple sample-path result that maps the echelon shortfalls in the serial system to the shortfalls of suitably defined single-stage systems. Because the shortfall processes of single-stage systems are well understood, our result allows us to reinterpret results in the literature on the stability and regeneration times of such multiechelon systems in a simpler fashion with weaker assumptions.

Suggested Citation

  • Woonghee Tim Huh & Ganesh Janakiraman & Mahesh Nagarajan, 2010. "Technical Note ---Capacitated Serial Inventory Systems: Sample Path and Stability Properties Under Base-Stock Policies," Operations Research, INFORMS, vol. 58(4-part-1), pages 1017-1022, August.
    • Handle: RePEc:inm:oropre:v:58:y:2010:i:4-part-1:p:1017-1022
    DOI: 10.1287/opre.1090.0779
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    References listed on IDEAS

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    1. Kevin H. Shang & Jing-Sheng Song, 2003. "Newsvendor Bounds and Heuristic for Optimal Policies in Serial Supply Chains," Management Science, INFORMS, vol. 49(5), pages 618-638, May.
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    Cited by:

    1. Ho-Yin Mak & Ying Rong & Jiawei Zhang, 2014. "Sequencing Appointments for Service Systems Using Inventory Approximations," Manufacturing & Service Operations Management, INFORMS, vol. 16(2), pages 251-262, May.
    2. Qi Feng & Zhongjie Ma & Zhaofang Mao & J. George Shanthikumar, 2021. "Multi‐Stage Supply Chain with Production Uncertainty," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 921-940, April.
    3. Stephen C. Graves & Tor Schoenmeyr, 2016. "Strategic Safety-Stock Placement in Supply Chains with Capacity Constraints," Manufacturing & Service Operations Management, INFORMS, vol. 18(3), pages 445-460, July.
    4. Woonghee Tim Huh & Ganesh Janakiraman & Mahesh Nagarajan, 2016. "Capacitated Multiechelon Inventory Systems: Policies and Bounds," Manufacturing & Service Operations Management, INFORMS, vol. 18(4), pages 570-584, October.
    5. Qingkai Ji & Lijun Sun & Xiangpei Hu & Jing Hou, 2016. "Optimal policies of a two-echelon serial inventory system with general limited capacities," International Journal of Production Research, Taylor & Francis Journals, vol. 54(20), pages 6142-6155, October.
    6. Wei Luo & Kevin Shang, 2015. "Joint Inventory and Cash Management for Multidivisional Supply Chains," Operations Research, INFORMS, vol. 63(5), pages 1098-1116, October.

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