Coordination of Production/Distribution Networks with Unbalanced Leadtimes

Julien Bramel (), Shobhna Goyal and Paul Zipkin
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Julien Bramel: Graduate School of Business, Columbia University, New York, New York 10027
Shobhna Goyal: Graduate School of Business, Columbia University, New York, New York 10027
Paul Zipkin: The Fuqua School of Business, Duke University, Durham, North Carolina 27708

Operations Research, 2000, vol. 48, issue 4, 570-577

Abstract: We investigate multiproduct, multilocation production/distribution networks with deterministic, stationary demands. Most research on such systems assumes zero leadtimes. Methods using fixed reorder intervals that are power-of-two multiples of a base planning period have proved to be very successful for such systems. The same methods apply to networks with positive leadtimes, provided the leadtimes are balanced in a specific sense. We explore networks with general, unbalanced leadtimes. A key result is a lower bound on the cost of any feasible policy. Other results concern policy heuristics and their performance. For a large class of networks, we construct a policy whose cost is within 45% of the lower bound. For general networks, the performance guarantee is 1:02(sqrt)(1+(eta)), where (eta) is a number dependent on the network topology only. In general, the best performance bound is obtained by systematically reducing the order intervals derived from the corresponding zero-leadtime system.

Keywords: Inventory/production: multi-item/echelon/stage; approximations/heuristics (search for similar items in EconPapers)
Date: 2000
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