Asset Details
Do you wish to reserve the book?
Optimal Policy for a Periodic-Review Inventory System Under a Supply Capacity Contract
Hey, we have placed the reservation for you!
By the way, why not check out events that you can attend while you pick your title.
Oops! Something went wrong.
Looks like we were not able to place the reservation. Kindly try again later.
Are you sure you want to remove the book from the shelf?
Optimal Policy for a Periodic-Review Inventory System Under a Supply Capacity Contract
Do you wish to request the book?
Optimal Policy for a Periodic-Review Inventory System Under a Supply Capacity Contract
Please be aware that the book you have requested cannot be checked out. If you would like to checkout this book, you can reserve another copy
We have requested the book for you!
Your request is successful and it will be processed during the Library working hours. Please check the status of your request in My Requests.
Oops! Something went wrong.
Looks like we were not able to place your request. Kindly try again later.
Journal Article
Optimal Policy for a Periodic-Review Inventory System Under a Supply Capacity Contract
2008
Overview
Transportation and production contracts often specify the frequency and volume reserved by the supplier for a particular customer's deliveries. This practice motivated Henig et al. (Henig, M., Y. Gerchak, R. Ernst, D. Pyke. 1997. An inventory model embedded in designing a supply contract. Management Sci. 43 184–189) to study a periodic-review inventory-control model where ordering cost is zero if the order quantity does not exceed a given contract volume and is linear in the excess quantity otherwise. This paper addresses the same problem but with a fixed cost if the order quantity is above the contract volume. The fixed cost may represent the cost of disruption for the supplier (finding more trucks, arranging extra processing capacity, persuading other customers to wait, etc.) as well as additional administrative costs. Also, suppliers may impose such costs simply to induce desired behavior by buyers. This order-cost function is neither convex nor concave. The classical inventory models with fixed costs are special cases with contract volume zero. We partially characterize the optimal policy for this system and develop a simple, effective heuristic policy. We also apply the model to a production-control problem in which an incentive is provided for not ordering over a certain quota.
Publisher
INFORMS,Institute for Operations Research and the Management Sciences
