Title: Shared information in a serial inventory system

Authors: Nima Yazdan Shenas, Abdolhamid Eshraghniaye Jahromi, Kourosh Eshghi

Addresses: Department of Industrial Engineering, University of Science and Culture, P.O. Box 13145-871, Tehran, Iran. ' Department of Industrial Engineering, Sharif University of Technology, P.O. Box 11365-9414, Tehran, Iran. ' Department of Industrial Engineering, Sharif University of Technology, P.O. Box 11365-9414, Tehran, Iran

Abstract: In this study, a supply chain model consisting of a single product, one supplier and one retailer is considered. Transportation times are constant and demands at the retailer are assumed to be generated by a stationary Poisson process. Demands not covered immediately from inventory are backordered. The retailer carries inventory and replenishes stock according to a (Q, R) policy. The supplier has online information about the demand at the retailer and uses this information to replenish its stock. The order size at the supplier is a multiple integer to the retailer|s order size. Considering order costs for the retailer and the supplier, we derive the exact cost function for this inventory system. Then, using a search method, the optimal solution for the exact value of the expected system costs is found. Furthermore, for utilising information in the supplier|s decision making, we resort to solve several numerical examples.

Keywords: two-level inventory systems; information exchange; continuous review; fixed order cost; Poisson demand; backordered demand; different order sizes; single products; information sharing; supply chain management; SCM; modelling.

DOI: 10.1504/IJAOM.2011.042135

International Journal of Advanced Operations Management, 2011 Vol.3 No.2, pp.101 - 121

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 28 Aug 2011 *

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