A continuous review serial production/distribution system with discrete compound Poisson demand for the end product is considered. Unmet demand is back-ordered. Production/transportation times are constant. All deliveries from one stage to the next must be multiples of given batch sizes. We...

This paper deals with the classical dynamic lot size problem without backlogging and capacity limitation. We derive worst case performance bounds for a class of lot sizing heuristics. When the considered methods are applied a decision whether to have a set-up or not in a certain period is taken...

In a recent paper, Cetinkaya and Lee (2000) model integrated inventory control and shipment scheduling in connection with vendor-managed inventory (VMI). The model is optimized by an approximate technique. This note provides a simple procedure for exact optimization, and illustrates that the...

In inventory systems with several bases that support different geographical regions, it is quite common to allow emergency lateral transshipments between the bases. This may be advantageous if neighbouring bases are at shorter distances than the central depot or the external supplier. This paper...

This paper deals with a single--echelon inventory system consisting of a number of parallel local warehouses facing compound Poisson demand. There are standard holding and backorder costs as well as ordering costs at all warehouses. Normally, the warehouses replenish from an outside supplier....

This note gives an improved bound (\root 5 - 2)/2 \approx 0.1180 for the relative cost increase when using the deterministic EOQ formula as a heuristic solution when demands are stochastic. We also discuss under what circumstances this bound is tight.

This paper considers a periodic-review, two-echelon inventory system with one central warehouse and several retailers facing stochastic demand. The retailers replenish their stock from the warehouse, which in turn places orders at an outside supplier with infinite capacity. Transportation times...

In this paper, we study the inventory system of an online retailer with compound Poisson demand. The retailer normally replenishes its inventory according to a continuous review (nQ, R) policy with a constant lead time. Usually demands that cannot be satisfied immediately are backordered. We...

This paper considers the choice of initial batch quantities when demand forecasts are improving. We assume that the standard deviation of the demand per period is decreasing exponentially and approaching a long-run value. A discrete time stochastic single-level inventory model is considered....

This paper compares installation and echelon stock policies for multilevel inventory control. The major results are for serial and assembly systems. For (Q, r)-rules, echelon stock policies are, in general, superior to installation stock policies. A Kanban-policy is identified as a restricted...