Inventory management with advance supply information

Mehmet Sekip Altug and Alp Muharremoglu

International Journal of Production Economics, 2011, vol. 129, issue 2, 302-313

Abstract: We consider a single stage inventory system with stochastic capacity. The manager receives forecasts from the upstream source about future capacity availability within an information horizon, referred to as "advance supply information". We study two main questions: (i) How can advance supply information be utilized when making replenishment decisions? (ii) What is the value of such information sharing, compared to a fixed base-stock policy? We show that state-dependent base-stock policies are optimal. We develop easily computable and implementable heuristic policies. We numerically test the accuracy of the approximations and analyze the value of collaboration under various business scenarios.

Keywords: Inventory; management; Capacitated; systems; Information; sharing (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925-5273(10)00434-2
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:129:y:2011:i:2:p:302-313

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().