 Allocation planning under service-level contractsKonstantin Kloos and Richard Pibernik European Journal of Operational Research, 2020, vol. 280, issue 1, 203-218 Abstract: Motivated by the practical limitations of current demand fulfillment systems, this paper addresses the problem of allocation planning under service-level contracts in a multi-period setting. We provide a formal definition of the allocation planning problem under a type of service-level contract that is particularly relevant to manufacturing industries and formulate a corresponding stochastic dynamic program. Based on a rigorous formal analysis of the dynamic program, we derive the requirements a “good” allocation policy should meet and use them to evaluate the heuristic policies proposed in the literature and to derive new allocation policies that may enhance the performance of allocation planning under service-level contracts. After detailed characterization and discussion of these new policies, we present the results of an extensive numerical study that allow us to quantify and compare allocation policies’ performance and to derive recommendations for decision makers in practice. Keywords: Applied probability; Supply chain management; Service levels; Demand fulfillment; Allocation planning (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:280:y:2020:i:1:p:203-218 DOI: 10.1016/j.ejor.2019.07.018 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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