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Dynamic re-order point inventory control with lead-time uncertainty: analysis and empirical investigation

Babai, MZ, Syntetos, A, Dallery, Y and Nikolopoulos, K 2009, 'Dynamic re-order point inventory control with lead-time uncertainty: analysis and empirical investigation' , International Journal of Production Research, 47 (9) , pp. 2461-2483.

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Abstract

A new forecast-based dynamic inventory control approach is discussed in this paper. In this approach, forecasts and forecast uncertainties are assumed to be exogenous data known in advance at each period over a fixed horizon. The control parameters are derived by using a sequential procedure. The merits of this approach as compared to the classical one are presented. We focus on a single-stage and single-item inventory system with non-stationary demand and lead-time uncertainty. A dynamic re-order point control policy is analysed based on the new approach and its parameters are determined for a given target cycle service level (CSL). The performance of this policy is assessed by means of empirical experimentation on a large demand data set from the pharmaceutical industry. The empirical results demonstrate the benefits arising from using such a policy and allow insights to be gained into other pertinent managerial issues.

Item Type: Article
Themes: Subjects outside of the University Themes
Schools: Colleges and Schools > College of Business & Law > Salford Business School > Operations and Global Logistics Management
Journal or Publication Title: International Journal of Production Research
Publisher: Taylor & Francis
Refereed: Yes
ISSN: 0020-7543
Funders: Engineering and Physical Sciences Research Council (EPSRC)
Depositing User: Professor Aris Syntetos
Date Deposited: 13 Oct 2011 11:46
Last Modified: 20 Jan 2014 20:53
URI: http://usir.salford.ac.uk/id/eprint/18296

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