On the use of independent base-stock policies in assemble-to-order inventory systems with nonidentical lead times

Reiman, Martin I.; Wan, Haohua; Wang, Qiong

doi:10.1016/j.orl.2016.04.004

Cited by 9 publications

(6 citation statements)

References 10 publications

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“…However, they allow lead times to be nonidentical. Reiman et al (2016) prove that the combination of the allocation policy used by Reiman and Wang (2015) and the independent base-stock replenishment policies is asymptotically optimal as the component lead times grow while their differences grow at a slower rate.…”

Section: Optimal Control Policiesmentioning

confidence: 89%

“…Nadar et al (2016) LD base-stock LD rationing L Exp. Plambeck (2008) Threshold FCFS L D Plambeck and Ward (2007) Base-stock FCFS L General Reiman and Wang (2012) Base-stock -B D Reiman and Wang (2015) Base-stock Backorder target B D Reiman et al (2016) Base-stock Backorder target B D Shao and Ji 2009---D Shi and Zhao 2014Base-stock NHB B D Song and Zhao (2009) Base-stock FIFO/MFIFO B D van Jaarsveld and Scheller-Wolf 2015Base-stock FCFS B D Wan and Wang 2015-B a c k o r d e r target B D Zhao (2009) Batch-ordering FCFS B General Zhao and Simchi-Levi (2006) Base-stock and batch-ordering FCFS B General Zhou and Chao (2012) Base-stock FCFS B D/General for Markov chains. For illustration of their method, they apply it to an assemble-to-order system and study an out-of-stock situation with three possibilities, namely; backordering, fulfilled partly and lost fully.…”

Section: Performance Metricsmentioning

confidence: 99%

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Assemble-to-order systems: A review

Atan¹,

Ahmadi²,

Stegehuis

et al. 2017

European Journal of Operational Research

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Section: Optimal Control Policiesmentioning

confidence: 89%

Section: Performance Metricsmentioning

confidence: 99%

Assemble-to-order systems: A review

Atan¹,

Ahmadi²,

Stegehuis

et al. 2017

European Journal of Operational Research

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“…Though a weaker standard than being exactly optimal, asymptotic optimality provides vital guidance to formulating novel inventory policies and evaluating their performance when meeting the latter criterion is analytically intractable. Asymptotic optimality has been used to justify the use of base stock policies in lost sale inventory systems (in the regime of high penalty costs) [15], ATO inventory systems with identical lead times [26] or when differences in lead times are small relative to the lead times themselves [24], or systems with non-stationary demands and probabilistic service level constraints [33]. It also supports the use of No-Hold-Back allocation policies in assemble-toorder N and W-systems [17].…”

Section: Introductionmentioning

confidence: 99%

Asymptotically Optimal Inventory Control for Assemble-to-Order Systems with Identical Lead Times

Reiman¹,

Wang

2015

Operations Research

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Optimizing multiproduct assemble-to-order (ATO) inventory systems is a long-standing difficult problem. We consider ATO systems with identical component lead times and a general "bill of materials." We use a related two-stage stochastic program (SP) to set a lower bound on the average inventory cost and develop inventory control policies for the dynamic ATO system using this SP. We apply the first-stage SP optimal solution to specify a base-stock replenishment policy, and the second-stage SP recourse linear program to make allocation decisions. We prove that our policies are asymptotically optimal on the diffusion scale, so the percentage gap between the average cost from its lower bound diminishes to zero as the lead time grows.Subject classifications: assemble-to-order; inventory management; stochastic linear program; stochastic control; asymptotic optimality; diffusion scale. Area of review: Stochastic Models.

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“…For systems with a single product, the policy reduces to an algorithm that is equivalent to that of Rosling (1989), and thus is exactly optimal. We also note that for systems where the different lead times are very close to one-another, the same level of asymptotic optimality can be achieved by following an independent base stock policy (Reiman et al 2016).…”

Section: Systems Withmentioning

confidence: 74%

A Survey of Recent Progress in the Asymptotic Analysis of Inventory Systems

Goldberg

Reiman

Wang

2021

Production and Operations Management

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I t has long been recognized that many inventory models most relevant to practice are inherently high-dimensional, and hence generally believed to become computationally intractable as certain problem parameters grow large (suffering from the "curse of dimensionality"). In the last decade, asymptotic analysis has shown that in many interesting settings such problems can actually be well-approximated by much simpler optimization problems, leading to new algorithms and insights. In this survey, we review the state-of-the-art as regards applying asymptotic analysis to such challenging inventory problems. In addition to surveying the literature, we present a detailed introduction to the relevant tools and methodologies through three in-depth case studies in which asymptotic analysis has recently led to major progress: lostsales models, dual-sourcing models, and Assemble-to-Order systems in the presence of large lead times.

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On the use of independent base-stock policies in assemble-to-order inventory systems with nonidentical lead times

Cited by 9 publications

References 10 publications

Assemble-to-order systems: A review

Assemble-to-order systems: A review

Asymptotically Optimal Inventory Control for Assemble-to-Order Systems with Identical Lead Times

A Survey of Recent Progress in the Asymptotic Analysis of Inventory Systems

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