An (s, r, S) diffusion inventory model with exponential leadtimes and order cancellations

DC FieldValueLanguage
dc.contributor.authorBerman, O.
dc.contributor.authorPerry, D.
dc.contributor.authorStadje, W.
dc.date.accessioned2021-12-23T16:16:12Z-
dc.date.available2021-12-23T16:16:12Z-
dc.date.issued2008
dc.identifier.issn15326349
dc.identifier.urihttps://osnascholar.ub.uni-osnabrueck.de/handle/unios/11771-
dc.description.abstractWe consider an inventory model of diffusion type for a single item, based on a so-called (s, r, S) policy, which is a refinement of the classical (s, S) policy. The content level process W = {W (t) : t >= 0 } behaves like a reflected Brownian motion with negative drift between jumps, at which replenishments are supplied which take the current content up to some prespecified level S. The process W starts at W(0) = S but is not bounded from above; the inventory is supposed to have infinite capacity. Whenever the content level drops to level s an order is placed to take the inventory back to level S, which the supplier will carry out after some random leadtime. However, if during a leadtime W reaches again a certain prespecified level r is an element of (s, S) (due to its intrinsic fluctuations), the order is cancelled and a penalty is paid. To assess the performance of this inventory system, one needs to compute several expected total discounted cost functionals of W: set-up cost (composed of the cost of actual replenishments and those of cancellations), variable delivery cost, holding cost, penalties on lost demands. All these functionals are derived in closed form as functions of the system primitives and in particular of the decision variables S, r and s. We also give some examples of numerical optimizations based on these results.
dc.language.isoen
dc.publisherTAYLOR & FRANCIS INC
dc.relation.ispartofSTOCHASTIC MODELS
dc.subjectDEMAND
dc.subjectdiffusion
dc.subjectexponenfial leadtimes
dc.subjectinventory
dc.subjectLEAD TIMES
dc.subjectmartingales
dc.subjectMathematics
dc.subjectorder cancellations
dc.subjectPOLICIES
dc.subjectStatistics & Probability
dc.subjectSYSTEMS
dc.subjectVENDOR-MANAGED INVENTORY
dc.titleAn (s, r, S) diffusion inventory model with exponential leadtimes and order cancellations
dc.typejournal article
dc.identifier.doi10.1080/15326340802016985
dc.identifier.isiISI:000255902700002
dc.description.volume24
dc.description.issue2
dc.description.startpage191
dc.description.endpage211
dc.publisher.place325 CHESTNUT ST, SUITE 800, PHILADELPHIA, PA 19106 USA
dcterms.isPartOf.abbreviationStoch. Models
crisitem.author.deptFB 06 - Mathematik/Informatik-
crisitem.author.deptidfb06-
crisitem.author.parentorgUniversität Osnabrück-
crisitem.author.netidStWo325-
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