Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit
In recent supply chains, often operating multiple delivery modes such as standard freight shipping and air is an effective way of addressing both delivery lead time uncertainties and service rates. We propose a model on how to optimally operate multiple delivery modes. We consider a serial supply ch...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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Wiley Blackwell
2016
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| Online Access: | http://hdl.handle.net/1721.1/101688 https://orcid.org/0000-0002-4650-1519 |
| _version_ | 1826205010646532096 |
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| author | Kim, Chiwon Klabjan, Diego Simchi-Levi, David |
| author2 | Massachusetts Institute of Technology. Department of Civil and Environmental Engineering |
| author_facet | Massachusetts Institute of Technology. Department of Civil and Environmental Engineering Kim, Chiwon Klabjan, Diego Simchi-Levi, David |
| author_sort | Kim, Chiwon |
| collection | MIT |
| description | In recent supply chains, often operating multiple delivery modes such as standard freight shipping and air is an effective way of addressing both delivery lead time uncertainties and service rates. We propose a model on how to optimally operate multiple delivery modes. We consider a serial supply chain and an expediting option from intermediate installations to the downstream of the chain. The goods move stochastically among the installations and the system faces a stochastic demand. We identify systems that yield simple optimal policies, in which both regular ordering and expediting follow a variant of the base stock policy. Expediting allows the system to be leaner due to the reduced regular order amount. In addition, we provide managerial insights linking expediting, base stock levels, and expediting costs based on analytical and numerical results. |
| first_indexed | 2024-09-23T13:05:39Z |
| format | Article |
| id | mit-1721.1/101688 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T13:05:39Z |
| publishDate | 2016 |
| publisher | Wiley Blackwell |
| record_format | dspace |
| spelling | mit-1721.1/1016882022-09-28T11:59:06Z Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time Kim, Chiwon Klabjan, Diego Simchi-Levi, David Massachusetts Institute of Technology. Department of Civil and Environmental Engineering Kim, Chiwon Simchi-Levi, David In recent supply chains, often operating multiple delivery modes such as standard freight shipping and air is an effective way of addressing both delivery lead time uncertainties and service rates. We propose a model on how to optimally operate multiple delivery modes. We consider a serial supply chain and an expediting option from intermediate installations to the downstream of the chain. The goods move stochastically among the installations and the system faces a stochastic demand. We identify systems that yield simple optimal policies, in which both regular ordering and expediting follow a variant of the base stock policy. Expediting allows the system to be leaner due to the reduced regular order amount. In addition, we provide managerial insights linking expediting, base stock levels, and expediting costs based on analytical and numerical results. 2016-03-14T13:21:45Z 2016-03-14T13:21:45Z 2015-03 2013-07 Article http://purl.org/eprint/type/JournalArticle 10591478 1937-5956 http://hdl.handle.net/1721.1/101688 Kim, Chiwon, Diego Klabjan, and David Simchi-Levi. “Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time.” Prod Oper Manag 24, no. 10 (March 2, 2015): 1524–1536. https://orcid.org/0000-0002-4650-1519 en_US http://dx.doi.org/10.1111/poms.12344 Production and Operations Management Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Wiley Blackwell Other repository |
| spellingShingle | Kim, Chiwon Klabjan, Diego Simchi-Levi, David Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit |
| title | Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit |
| title_full | Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit |
| title_fullStr | Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit |
| title_full_unstemmed | Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit |
| title_short | Optimal Expediting Policies for a Serial Inventory System with Stochastic Lead Time and Visibility of Orders in Transit |
| title_sort | optimal expediting policies for a serial inventory system with stochastic lead time and visibility of orders in transit |
| url | http://hdl.handle.net/1721.1/101688 https://orcid.org/0000-0002-4650-1519 |
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