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Title: A continuous approximation procedure for determining inventory distribution schemas within supply chains: gradual and intermittent shipping patterns

Authors: Faizul Huq; Trevor S. Hale; Nikhil A. Pujari

Addresses: Department of Management, Ohio University, Athens, Ohio 45701, USA ' Department of Information and Operations Management, Texas A&M University, College Station, Texas 77843, USA ' Pace Harmon Consulting, 444 North Michigan Avenue, Suite 1960, Chicago, IL 60611, USA

Abstract: The popularity of supply chain integration models is increasing. The research in this paper builds upon prior research and presents an integrated inventory supply chain optimisation model that incorporates the issues of location, production, inventory, and transportation simultaneously. The objective of the current research is to determine the optimal number as well as the optimal size of shipments under a variety of production and shipping rate scenarios. Previous research in this area assumed instantaneous shipping. Herein, this assumption is generalised to include a non-instantaneous, gradual shipping pattern as well as staggered, more intermittent shipping pattern. These two more generalised shipping scenarios (each with several sub-scenarios) are investigated and closed form expressions for the optimal number and the optimal size of shipments for each scenario are obtained. A detailed numerical example is presented to demonstrate the efficacy of the approach.

Keywords: distribution system; inventory management; supply chain; continuous approximation; shipping pattern.

DOI: 10.1504/IJOR.2020.104224

International Journal of Operational Research, 2020 Vol.37 No.1, pp.48 - 84

Received: 02 Jun 2016
Accepted: 13 Jan 2017

Published online: 18 Dec 2019 *

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