The production size and inventory policy for a manufacturer in a two-echelon inventory model

Lin, Chinho; Lin, Yihsu

doi:10.1016/j.cor.2003.10.003

Cited by 10 publications

(5 citation statements)

References 12 publications

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“…It seems interesting and expedient to turn further also to the analysis of the corresponding diffusion approximations. One more natural direction of further studies is to extend the results to systems with a more complex structure (see, for example, [17,23]), and to allow for investments (see [15]) and the choice of an optimal return policy (see [28,29,32]). …”

Section: Final Remarksmentioning

confidence: 98%

“…Morse and G. E. Kimbell on operations research [24] was published. This model has attracted the attention of scientists for half a century (see, for example, [23,25]). Mathematical inventory theory as an independent area of science is usually associated with the study by K. J. Arrow, T. Harris, and J. Marschak [10] (1951), then by A. Dvoretzky, J. Kiefer, and J. Wolfowitz [18, 19] (1952-1953), and by R. Bellman, J. Glicksberg, and O.…”

Section: Introductionmentioning

confidence: 99%

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Cost and Reliability Approaches in Inventory Theory

Bulinskaya

2005

Cybern Syst Anal

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Section: Final Remarksmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

Cost and Reliability Approaches in Inventory Theory

Bulinskaya

2005

Cybern Syst Anal

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“…Lin et al [11] proposed a two-echelon inventory model for a periodical commodity, in which the market and manufacturing channels are combined. Rahman et al [12] investigated the material procurement and delivery policy in a production system, where raw materials enter into the assembly line from two different flow channels.…”

Section: Introductionmentioning

confidence: 99%

Acquisition and production management with two inventories under fluctuating prices and demand

Cao

Huang

Wen

2009

Wuhan Univ. J. Nat. Sci.

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We propose a continuously deterministic procurementproduction-inventory model to optimize the raw material procurement and production problem with raw material inventory and finished products inventory when the raw material purchasing price, the production cost, the raw material inventory holding cost, the finished products holding cost, and the demand rate fluctuate over time. We use Hamilton-Lagrange function and Pontryagin's maximum principle in optimal control theory to analyze the model, and we obtain the necessary and sufficiency conditions of the optimal solution to the model. We find some optimal policies regarding the procurement and production under some special circumstances.With the great development of the worldwide market economy, the competitions among manufacturing corporations are becoming sharper. The raw material procurement prices can impose a high influence on tied-up capital and therefore the total cost of final products and company's profit. On the other hand, fluctuations of production costs are commonly faced by many manufacturing firms. If the production policy were not properly managed, the fluctuations could also inflict damages to the firm.Several contributions address the raw material procurement, production, and related inventory policy problems. Khmelnitsky et al [1] state a stationary capacitated inventory and production problem, analyze it in both discrete and continuous time, and give guidelines under which circumstances the models yield similar results, whereas Luhmer [2] formulates a nonstationary control problem considering ordering cost in three settings, backlogging, nonbacklogging, and limited warehouse space. Silver et al [3] and Grubbstrom et al [4] analyze EOQ models to solve the procurement problems. Toktay et al [5] considered a production stage that produces a single item in a make-to-stock manner, in which demand for finished products is stationary. He et al [6] dealt with several inventory replenishment policies for a make-to-order inventory-production problem that consists of a production workshop and a warehouse and Poisson demands. Golabi [7] considered a problem with an independent price process, negligible setup cost, and deterministic but

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“…They also did the sensitivity analysis on the effect of the sales price and the probabilistic demand distribution to the inventory decision. Lin and Lin (2005) proposed a two-stage periodic-merchandise inventory model, which considers both the market and the manufacturer and which can be used to determine the production and the raw material order strategy for a manufacturer and the retailer. In this model the demand of a retailer has a normal distribution and the ordering rule of a retailer follows the newsboy principle.…”

Section: Introductionmentioning

confidence: 99%

A newsboy inventory model with recyclable and defective items

Chen

Wee

Hsieh

et al. 2008

2008 International Conference on Machine Learning and Cybernetics

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In this research, we consider the products of a single-period inventory with fixed life cycle. The classical newsboy model was extended with return policy for reusable and imperfect items. The optimum order quantity is derived in cases with or without collaboration. Finally, Numerical examples are carried out to analyze the influence of the inventory system. From numerical examples, it is shown that profit with collaboration is highest in all situations. Obviously, the collaborative model is an approach to achieve the objective of integrating manufacturer-retailer channel.

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The production size and inventory policy for a manufacturer in a two-echelon inventory model

Cited by 10 publications

References 12 publications

Cost and Reliability Approaches in Inventory Theory

Cost and Reliability Approaches in Inventory Theory

Acquisition and production management with two inventories under fluctuating prices and demand

A newsboy inventory model with recyclable and defective items

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