Customer-Order Information, Leadtimes, and Inventories

Rema Hariharan and Paul Zipkin
Additional contact information
Rema Hariharan: AT&T Bell Laboratories, Holmdel, New Jersey 07733
Paul Zipkin: The Fuqua School of Business, Duke University, Durham, North Carolina 27708

Management Science, 1995, vol. 41, issue 10, 1599-1607

Abstract: We have an inventory to manage. The scenario is standard in all respects save one. Instead of arriving unannounced, customers provide advance warning of their demands. How should we use this information, and what is its effect on system performance? The answers turn out to be strikingly simple. There are very simple policies which perform effectively, in some cases optimally. Also such "demand leadtimes" improve performance, in precisely the same way that replenishment leadtimes degrade it.

Keywords: value of information; customer supplier relations; inventory control (search for similar items in EconPapers)
Date: 1995
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