Can-order policy for the periodic-review joint replenishment problem

In this paper we study the stochastic joint replenishment problem. We compare the class of periodic replenishment policies and the class of can-order policies for this problem. We present a method, based on Markov decision theory, to calculate near-optimal can-order policies for a periodic-review in...

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Veröffentlicht in:	The Journal of the Operational Research Society 2003-03, Vol.54 (3), p.283-290
Hauptverfasser:	Johansen, S G, Melchiors, P
Format:	Artikel
Sprache:	eng
Schlagworte:	Access to information Algorithms Applied sciences Average cost Business and Management can-order policy Carrying costs Cost efficiency Decision theory Decomposition Discounts Electronic data interchange Exact sciences and technology Fixed costs Inventory control Inventory control, production control. Distribution joint replenishment Management Markov analysis Markov processes Operational research and scientific management Operational research. Management science Operations research Operations Research/Decision Theory Optimal policy Poisson process Random variables Studies Theoretical Paper Theoretical Papers
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Beschreibung
Zusammenfassung:	In this paper we study the stochastic joint replenishment problem. We compare the class of periodic replenishment policies and the class of can-order policies for this problem. We present a method, based on Markov decision theory, to calculate near-optimal can-order policies for a periodic-review inventory system. Our numerical study shows that the can-order policy behaves as well as, if not better than, the periodic replenishment policies. In particular, for examples where the demand is irregular, we find cost differences up to 15% in favour of the can-order policy.
ISSN:	0160-5682 1476-9360
DOI:	10.1057/palgrave.jors.2601499