IDEAS home Printed from https://ideas.repec.org/p/gro/rugsom/02a15.html
   My bibliography  Save this paper

The effect of foreknowledge of demand in case of a restricted capacity: the single-stage, singleproduct case with lost sales

Author

Listed:
  • Wijngaard, J.

    (Groningen University)

Abstract

Foreknowledge of demand is useful in the control of a production-inventory system. Knowingthe customer orders in advance makes it possible to anticipate properly. It is an importantcondition to produce and deliver the right quantity of the right product “just-in-time”. Itreduces the need of safety stock and spare capacity. But the question of the effectiveness offoreknowledge is not an easy one. Having foreknowledge of the customer orders does notremove the demand uncertainty completely. The effect of foreknowledge has to be consideredin a stochastic dynamic setting. The subject of this paper is the effect of foreknowledge incombination with a restricted production capacity. The lost-sales case is considered. The mainresult is that for high utilization rates and small forecast horizon, the inventory reduction dueto foreknowledge is equal to (1- pi).h, with h the forecast horizon

Suggested Citation

  • Wijngaard, J., 2002. "The effect of foreknowledge of demand in case of a restricted capacity: the single-stage, singleproduct case with lost sales," Research Report 02A15, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    • Handle: RePEc:gro:rugsom:02a15
    as

    Download full text from publisher

    File URL: http://irs.ub.rug.nl/ppn/239642163
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. van der Veen, B., 1981. "Safety stocks -- an example of theory and practice in O.R," European Journal of Operational Research, Elsevier, vol. 6(4), pages 367-371, April.
    2. Kenneth R. Baker & David W. Peterson, 1979. "An Analytic Framework for Evaluating Rolling Schedules," Management Science, INFORMS, vol. 25(4), pages 341-351, April.
    3. van der Veen, B., 1984. "Safety stocks and the paradox of the empty period," European Journal of Operational Research, Elsevier, vol. 16(1), pages 19-33, April.
    4. Baker, Kenneth R., 1981. "An analysis of terminal conditions in rolling schedules," European Journal of Operational Research, Elsevier, vol. 7(4), pages 355-361, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:dgr:rugsom:02a15 is not listed on IDEAS
    2. Wijngaard, J., 2004. "The effect of foreknowledge of demand in case of a restricted capacity: The single-stage, single-product case," European Journal of Operational Research, Elsevier, vol. 159(1), pages 95-109, November.
    3. Kimms, Alf, 1996. "Stability measures for rolling schedules with applications to capacity expansion planning, master production scheduling, and lot sizing," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 418, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    4. Kimms, A, 1998. "Stability Measures for Rolling Schedules with Applications to Capacity Expansion Planning, Master Production Scheduling, and Lot Sizing," Omega, Elsevier, vol. 26(3), pages 355-366, June.
    5. de Kok, A.G., 1991. "Basics of inventory management (Part 3) : The (b,Q)-model," Other publications TiSEM 6246c727-9564-453e-8908-9, Tilburg University, School of Economics and Management.
    6. van der Heijden, Matthieu, 2000. "Near cost-optimal inventory control policies for divergent networks under fill rate constraints," International Journal of Production Economics, Elsevier, vol. 63(2), pages 161-179, January.
    7. Salewski, Frank & Nissen, Rüdiger, 1993. "Revidierende hierarchische Planung: Ein Konzept am Beispiel der Personaleinsatzplanung in Wirtschaftsprüfungsgesellschaften," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 335, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    8. de Kok, A.G., 1991. "Basics of inventory management (Part 6) : The (R,s,S)-model)," Research Memorandum FEW 525, Tilburg University, School of Economics and Management.
    9. Kriett, Phillip Oliver & Salani, Matteo, 2012. "Optimal control of a residential microgrid," Energy, Elsevier, vol. 42(1), pages 321-330.
    10. de Kok, A.G., 1991. "Basics of inventory management (Part 2) : The (R,S)-model," Research Memorandum FEW 521, Tilburg University, School of Economics and Management.
    11. de Kok, A.G., 1991. "Basics of inventory management (Part 1) : Renewal theoretic background," Other publications TiSEM 32e622f4-bbfb-4746-b7e3-a, Tilburg University, School of Economics and Management.
    12. Schütz, Peter & Tomasgard, Asgeir, 2011. "The impact of flexibility on operational supply chain planning," International Journal of Production Economics, Elsevier, vol. 134(2), pages 300-311, December.
    13. Cattani, Kyle D., 2016. "Fenced in? Stochastic and deterministic planning models in a time-fenced, rolling-horizon scheduling systemAuthor-Name: DeYong, Gregory D," European Journal of Operational Research, Elsevier, vol. 251(1), pages 85-95.
    14. Haeussler, S. & Stampfer, C. & Missbauer, H., 2020. "Comparison of two optimization based order release models with fixed and variable lead times," International Journal of Production Economics, Elsevier, vol. 227(C).
    15. de Kok, A.G., 1991. "Basics of inventory management (Part 4) : The (s,S)-model," Other publications TiSEM ae7355df-1b26-4803-aab7-1, Tilburg University, School of Economics and Management.
    16. de Kok, A.G., 1991. "Basics of inventory management (Part 5) : The (R,b,Q)-model," Other publications TiSEM a9f53590-b056-461c-8bae-4, Tilburg University, School of Economics and Management.
    17. Bertrand, J. W. M. & Rutten, W. G. M. M., 1999. "Evaluation of three production planning procedures for the use of recipe flexibility," European Journal of Operational Research, Elsevier, vol. 115(1), pages 179-194, May.
    18. Suresh Chand & Vernon Ning Hsu & Suresh Sethi, 2002. "Forecast, Solution, and Rolling Horizons in Operations Management Problems: A Classified Bibliography," Manufacturing & Service Operations Management, INFORMS, vol. 4(1), pages 25-43, September.
    19. Gonçalves, João N.C. & Sameiro Carvalho, M. & Cortez, Paulo, 2020. "Operations research models and methods for safety stock determination: A review," Operations Research Perspectives, Elsevier, vol. 7(C).
    20. de Kok, A.G., 1991. "Basics of inventory management (Part 4) : The (s,S)-model," Research Memorandum FEW 523, Tilburg University, School of Economics and Management.
    21. de Kok, A.G., 1991. "Basics of inventory management (Part 3) : The (b,Q)-model," Research Memorandum FEW 522, Tilburg University, School of Economics and Management.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gro:rugsom:02a15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hanneke Tamling (email available below). General contact details of provider: https://edirc.repec.org/data/ferugnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.