An improved decision rule for emergency replenishments

• This paper provides a new decision rule for emergency replenishments in an inventory system. The decision rule is a generalization of a previous decision rule suggested and evaluated in Axsater (2003, 2007). An improvement step is added to this rule and this often means considerably better performance. The decisions are based on complete information about the system state. An advantage with our decision rule is its generality. It is possible to handle batch ordering, compound Poisson demand and emergency replenishments that take time. The decision rule has also a performance guarantee in the sense that emergency replenishments will always lead to lower expected costs. The rule can also be used in connection with lateral transshipments. (C) 2014 Elsevier B.V. All rights reserved.

Subject headings

TEKNIK OCH TEKNOLOGIER  -- Samhällsbyggnadsteknik -- Transportteknik och logistik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Civil Engineering -- Transport Systems and Logistics (hsv//eng)

Keyword

Inventory

Stochastic

Emergency replenishments

Lateral transshipments

Publication and Content Type

art (subject category)

ref (subject category)