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Analysis of the Best Double Frequency Policy in the Single Link Problem with Discrete Shipping Times

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  • Luca Bertazzi

    (University of Brescia)

  • Lap Mui Ann Chan

Abstract

We study an inventory–transportation problem where one product has to be shipped from an origin to a destination by vehicles of given capacity over an infinite time horizon. The product is made available at the origin and consumed at the destination at the same constant rate. The intershipment time must be not lower than a given minimum value. The problem is to decide when to make the shipments and how to load the vehicles to minimize the sum of the transportation and the inventory costs at the origin and at the destination per time unit. We study the case in which the intershipment time is a multiple of the minimum value, i.e., the problem with discrete shipping times. We show that, in this case, the best double frequency policy has a tight performance bound of about 1.1603 with respect to the optimal periodic policy and of about 1.1538 with respect to the best frequency-based policy. Moreover, we show that, from the worst-case point of view, the best double frequency policy is the optimal frequency-based policy.

Suggested Citation

  • Luca Bertazzi & Lap Mui Ann Chan, 2014. "Analysis of the Best Double Frequency Policy in the Single Link Problem with Discrete Shipping Times," Journal of Optimization Theory and Applications, Springer, vol. 163(1), pages 286-309, October.
    • Handle: RePEc:spr:joptap:v:163:y:2014:i:1:d:10.1007_s10957-013-0476-4
    DOI: 10.1007/s10957-013-0476-4
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