Reducing order and inventory variability under stochastic lead-time and correlated demand

Wang, Xun ORCID: https://orcid.org/0000-0001-7800-726X and Disney, Stephen Michael ORCID: https://orcid.org/0000-0003-2505-9271 2015. Reducing order and inventory variability under stochastic lead-time and correlated demand. Presented at: 6th IESM Conference, Seville, Spain, 21 - 23 October 2015.

Preview

PDF - Accepted Post-Print Version Download (1MB) | Preview

Abstract

Logistic volatility is considered to be an important contributor to supply chain inefficiency. In this paper we investigate the amplification of order and inventory fluctuations in a state-space model with stochastic lead time, ARMA(p,q) demand and a proportional order-up-to policy. We derive the exact distribution functions for order and inventory. For i.i.d. Gaussian demand, we prove that the proportional outperforms the classical order-up-to policy in reducing inventory and order variances simultaneously. Numerical experiments are carried out to show the complex interaction between demand correlation and stochastic lead-time.

Item Type:	Conference or Workshop Item (Paper)
Date Type:	Completion
Status:	Unpublished
Schools:	Centre for Advanced Manufacturing Systems At Cardiff (CAMSAC) Business (Including Economics)
Subjects:	H Social Sciences > HE Transportation and Communications T Technology > TS Manufactures
Related URLs:	http://ifors.org/web/6th-international-c...
Date of First Compliant Deposit:	30 March 2016
Last Modified:	28 Oct 2022 09:48
URI:	https://orca.cardiff.ac.uk/id/eprint/75761

Actions (repository staff only)

Edit Item