Jeppesen Uses a Dynamic-Programming-Based DSS to Manage Inventory

Elena Katok (), Andrew Lathrop (), William Tarantino () and Susan H. Xu ()
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Andrew Lathrop: Accenture, Capability Modeling and Simulation, 161 North Clark Street, Chicago, Illinois 60601
William Tarantino: Center for Army Analysis, 6001 Goethals Road, Fort Belvoir, Virginia 22060
Susan H. Xu: Department of Management Science and Information Systems, Penn State University

Interfaces, 2001, vol. 31, issue 6, 54-65

Abstract: We developed a system for managing inventory at Jeppesen Sanderson, Inc., a major provider of aviation-information products. The system determines order quantities for charts used in flight manuals. These charts contain essential safety information that changes frequently, making standard methods for inventory management ineffective. We formulated the problem as a dynamic programming model and developed a simple heuristic-solution procedure for determining order quantities. Based on this procedure, we also developed a decision support system (DSS) and implemented it for 600 of the most expensive Jeppesen charts. The system has been in use since August 1998, generating actual annual cost reductions of over $800,000.

Keywords: DYNAMIC PROGRAMMING—APPLICATIONS; INVENTORY/PRODUCTION—PERISHABLE/AGING ITEMS (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (7)

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