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The stochastic guaranteed service model with recourse for multi-echelon warehouse management

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  • Jörg Rambau
  • Konrad Schade

Abstract

The guaranteed service model (GSM) computes optimal order-points in multi-echelon inventory control under the assumptions that delivery times can be guaranteed and the demand is bounded. Our new stochastic guaranteed service model (SGSM) with Recourse covers also scenarios that violate these assumptions. Simulation experiments on real-world data of a large German car manufacturer show that policies based on the SGSM dominate GSM-policies. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Jörg Rambau & Konrad Schade, 2014. "The stochastic guaranteed service model with recourse for multi-echelon warehouse management," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 79(3), pages 293-326, June.
    • Handle: RePEc:spr:mathme:v:79:y:2014:i:3:p:293-326
    DOI: 10.1007/s00186-014-0464-y
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    References listed on IDEAS

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    1. Inderfurth, Karl, 1994. "Safety stocks in multistage divergent inventory systems: A survey," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 321-329, June.
    2. Stephen C. Graves & Sean P. Willems, 2000. "Optimizing Strategic Safety Stock Placement in Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 2(1), pages 68-83, June.
    3. Inderfurth, Karl, 1991. "Safety stock optimization in multi-stage inventory systems," International Journal of Production Economics, Elsevier, vol. 24(1-2), pages 103-113, November.
    4. Andrew J. Clark & Herbert Scarf, 2004. "Optimal Policies for a Multi-Echelon Inventory Problem," Management Science, INFORMS, vol. 50(12_supple), pages 1782-1790, December.
    5. Craig C. Sherbrooke, 1968. "Metric: A Multi-Echelon Technique for Recoverable Item Control," Operations Research, INFORMS, vol. 16(1), pages 122-141, February.
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    Cited by:

    1. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    2. Eruguz, Ayse Sena & Sahin, Evren & Jemai, Zied & Dallery, Yves, 2016. "A comprehensive survey of guaranteed-service models for multi-echelon inventory optimization," International Journal of Production Economics, Elsevier, vol. 172(C), pages 110-125.
    3. Bengisu Urlu & Nesim K. Erkip, 2020. "Safety stock placement for serial systems under supply process uncertainty," Flexible Services and Manufacturing Journal, Springer, vol. 32(2), pages 395-424, June.

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