Title: Inventory model based upon order criticality

Authors: Kamal Sanguri; Sri Vanamalla Venkataraman

Addresses: Department of Industrial and Management Engineering, Indian Institute of Technology Kanpur, Kalyanpur, Kanpur, Uttar Pradesh 208016, India ' Department of Industrial and Management Engineering, Indian Institute of Technology Kanpur, Kalyanpur, Kanpur, Uttar Pradesh 208016, India

Abstract: For a typical distribution network, we can segregate the demand at the central demand catering centre as critical if the order is triggered by a direct customer requirement and non-critical if the replenishment order is triggered for routine stocking purpose by the customer touch point. In the traditional model discussed in literature the segregation is based upon the use based criterion, with the objective of keeping the cost of ordering, shortages and inventory at a minimum level. Through this research we propose a modification of the traditional model by incorporating different classes of demand based upon their criticality while maintaining appropriate service levels to them.

Keywords: inventory management; rationing; service level; critical level.

DOI: 10.1504/IJOR.2021.114304

International Journal of Operational Research, 2021 Vol.40 No.3, pp.380 - 409

Received: 11 Aug 2017
Accepted: 03 Jul 2018
Published online: 16 Apr 2021 *

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