Price-Directed Control of Remnant Inventory Systems

Daniel Adelman and George L. Nemhauser
Additional contact information
Daniel Adelman: The University of Chicago, Graduate School of Business, 1101 East 58th Street, Chicago, Illinois 60637
George L. Nemhauser: Logistics Engineering Center, School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30332

Operations Research, 1999, vol. 47, issue 6, 889-898

Abstract: Motivated by make-to-order cable manufacturing, we describe a remnant inventory system in which orders arrive for units of raw material that are produced-to-stock. As orders are satisfied, the partially consumed units of material, or remnants, are either scrapped or returned to inventory for future allocation to orders. We present a linear program that minimizes the long-run average scrap rate. Its dual prices exhibit many rational properties, including monotonicity and superadditivity. We use these prices in an integer-programming-based control scheme, which we simulate and compare with an existing control scheme previously used in practice.

Keywords: production/scheduling; cutting stock; dynamic; networks; generalized networks; duality theory; programming; integer; applications; fiber-optic cable manufacturing (search for similar items in EconPapers)
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://dx.doi.org/10.1287/opre.47.6.889 (application/pdf)

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:inm:oropre:v:47:y:1999:i:6:p:889-898

Access Statistics for this article

More articles in Operations Research from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().