Economic consequences of a production and inventory control policy

Disney, Stephen Michael ORCID: https://orcid.org/0000-0003-2505-9271 and Grubbström, R. W. 2004. Economic consequences of a production and inventory control policy. International Journal of Production Research 42 (17) , pp. 3419-3431. 10.1080/00207540410001727640

Preview

PDF - Accepted Post-Print Version Download (397kB) | Preview

Abstract

The economic performance of a generalized Order-Up-To policy is investigated in response to an Auto Regressive stochastic demand process. Focus is on the case where the physical production/distribution lead time is one period and where demand is forecasted with simple exponential smoothing. Two sets of convex piece-wise linear costs are considered. The first set is the traditional inventory holding and backlog costs. The second set of costs is piece-wise linear and increasing convex costs associated with the production order rate within and above a capacity constraint. Numerical investigations reveal that the classical Order-Up-To policy is no longer optimal when a broader range of costs is considered in the objective function.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics) Centre for Advanced Manufacturing Systems At Cardiff (CAMSAC)
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce H Social Sciences > HF Commerce > HF5601 Accounting
Publisher:	Taylor & Francis
ISSN:	0020-7543
Date of First Compliant Deposit:	30 March 2016
Last Modified:	03 Dec 2024 11:30
URI:	https://orca.cardiff.ac.uk/id/eprint/42223

Citation Data

Cited 46 times in Scopus. View in Scopus. Powered By Scopus® Data

Actions (repository staff only)

Edit Item