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Optimal expediting decisions in a continuous-stage serial supply chain

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  • Berling, Peter

    (Lund University)

  • Martinez de Albeniz, Victor

    () (IESE Business School)

Abstract

In this paper, we analyze expediting decisions in a continuous-time, continuous-stage serial supply chain facing a Poisson demand process. For each unit in the chain, one must decide at which speed it should be moved downstream, given the state of the system, so as to minimize total supply chain costs. We decompose the problem into a set of one-dimensional subproblems that can be easily solved and characterize the optimal expediting policy: under quite general assumptions, the optimal speed of a given unit accelerates upstream, and then slows down downstream. We finally provide a case study where we estimate the benefits of expediting compared to a fixed transportation speed and show them to be significant.

Suggested Citation

  • Berling, Peter & Martinez de Albeniz, Victor, 2011. "Optimal expediting decisions in a continuous-stage serial supply chain," IESE Research Papers D/906, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0906
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    File URL: http://www.iese.edu/research/pdfs/DI-0906-E.pdf
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    1. repec:eee:ejores:v:262:y:2017:i:1:p:75-88 is not listed on IDEAS

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    Keywords

    lead-time management; optimal control; unit-tracking decomposition;

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