TY - JOUR
T1 - Inventory allocation models for a two-stage, two-product, capacitated supplier and retailer problem with random demand
AU - Luo, Kai
AU - Bollapragada, Ramesh
AU - Kerbache, Laoucine
N1 - Publisher Copyright:
© 2017
PY - 2017/5/1
Y1 - 2017/5/1
N2 - The objective of this research is to develop an optimal inventory allocation methodology for a supply chain consisting of a capacitated retailer with limited shelf space, and two unreliable capacitated suppliers in an uncertain environment. We develop conceptual and analytical models that provide allocation preferences between shelf-space and warehouse in both deterministic and stochastic demand cases, and develop managerial insights based on them. For each case, we provide both a closed-form solution and a heuristic method, and illustrate the bounds on the optimal solution. Further, we show that the cost function is L⋄-convex in some cases. Finally, we prove that the expected profit decreases as the variance of demand increases.
AB - The objective of this research is to develop an optimal inventory allocation methodology for a supply chain consisting of a capacitated retailer with limited shelf space, and two unreliable capacitated suppliers in an uncertain environment. We develop conceptual and analytical models that provide allocation preferences between shelf-space and warehouse in both deterministic and stochastic demand cases, and develop managerial insights based on them. For each case, we provide both a closed-form solution and a heuristic method, and illustrate the bounds on the optimal solution. Further, we show that the cost function is L⋄-convex in some cases. Finally, we prove that the expected profit decreases as the variance of demand increases.
KW - Capacity allocation
KW - Heuristic methods
KW - Inventory management
KW - Supply chain management
UR - http://www.scopus.com/inward/record.url?scp=85014833160&partnerID=8YFLogxK
U2 - 10.1016/j.ijpe.2016.12.014
DO - 10.1016/j.ijpe.2016.12.014
M3 - Article
AN - SCOPUS:85014833160
SN - 0925-5273
VL - 187
SP - 168
EP - 181
JO - International Journal of Production Economics
JF - International Journal of Production Economics
ER -