On the value of customer information for an independent supplier in a continuous review inventory system
We consider the inventory control problem of an independent supplier in a continuous review system. The supplier faces demand from a single customer who in turn faces Poisson demand and follows a continuous review (R, Q) policy. If no information about the inventory levels at the customer is availab...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Journal Article |
| Language: | English |
| Published: |
2013
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/100798 http://hdl.handle.net/10220/18077 |
| _version_ | 1811690329117556736 |
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| author | Viswanathan, S. Axsäter, Sven |
| author2 | Nanyang Business School |
| author_facet | Nanyang Business School Viswanathan, S. Axsäter, Sven |
| author_sort | Viswanathan, S. |
| collection | NTU |
| description | We consider the inventory control problem of an independent supplier in a continuous review system. The supplier faces demand from a single customer who in turn faces Poisson demand and follows a continuous review (R, Q) policy. If no information about the inventory levels at the customer is available, reviews and ordering are usually carried out by the supplier only at points in time when a customer demand occurs. It is common to apply an installation stock reorder point policy. However, as the demand faced by the supplier is not Markovian, this policy can be improved by allowing placement of orders at any point in time. We develop a time delay policy for the supplier, wherein the supplier waits until time t after occurrence of the customer demand to place his next order. If the next customer demand occurs before this time delay, then the supplier places an order immediately. We develop an algorithm to determine the optimal time delay policy. We then evaluate the value of information about the customer’s inventory level. Our numerical study shows that if the supplier were to use the optimal time delay policy instead of the installation stock policy then the value of the customer’s inventory information is not very significant. |
| first_indexed | 2024-10-01T06:02:16Z |
| format | Journal Article |
| id | ntu-10356/100798 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T06:02:16Z |
| publishDate | 2013 |
| record_format | dspace |
| spelling | ntu-10356/1007982023-05-19T06:44:42Z On the value of customer information for an independent supplier in a continuous review inventory system Viswanathan, S. Axsäter, Sven Nanyang Business School DRNTU::Business We consider the inventory control problem of an independent supplier in a continuous review system. The supplier faces demand from a single customer who in turn faces Poisson demand and follows a continuous review (R, Q) policy. If no information about the inventory levels at the customer is available, reviews and ordering are usually carried out by the supplier only at points in time when a customer demand occurs. It is common to apply an installation stock reorder point policy. However, as the demand faced by the supplier is not Markovian, this policy can be improved by allowing placement of orders at any point in time. We develop a time delay policy for the supplier, wherein the supplier waits until time t after occurrence of the customer demand to place his next order. If the next customer demand occurs before this time delay, then the supplier places an order immediately. We develop an algorithm to determine the optimal time delay policy. We then evaluate the value of information about the customer’s inventory level. Our numerical study shows that if the supplier were to use the optimal time delay policy instead of the installation stock policy then the value of the customer’s inventory information is not very significant. Accepted version 2013-12-05T03:21:55Z 2019-12-06T20:28:28Z 2013-12-05T03:21:55Z 2019-12-06T20:28:28Z 2012 2012 Journal Article Axsäter, S., & Viswanathan, S. (2012). On the value of customer information for an independent supplier in a continuous review inventory system. European Journal of Operational Research, 221(2), 340-347. 0377-2217 https://hdl.handle.net/10356/100798 http://hdl.handle.net/10220/18077 10.1016/j.ejor.2012.03.022 en European journal of operational research © 2012 Elsevier. This is the author created version of a work that has been peer reviewed and accepted for publication by European Journal of Operational Research, Elsevier. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [http://dx.doi.org/10.1016/j.ejor.2012.03.022]. 7 p. application/pdf |
| spellingShingle | DRNTU::Business Viswanathan, S. Axsäter, Sven On the value of customer information for an independent supplier in a continuous review inventory system |
| title | On the value of customer information for an independent supplier in a continuous review inventory system |
| title_full | On the value of customer information for an independent supplier in a continuous review inventory system |
| title_fullStr | On the value of customer information for an independent supplier in a continuous review inventory system |
| title_full_unstemmed | On the value of customer information for an independent supplier in a continuous review inventory system |
| title_short | On the value of customer information for an independent supplier in a continuous review inventory system |
| title_sort | on the value of customer information for an independent supplier in a continuous review inventory system |
| topic | DRNTU::Business |
| url | https://hdl.handle.net/10356/100798 http://hdl.handle.net/10220/18077 |
| work_keys_str_mv | AT viswanathans onthevalueofcustomerinformationforanindependentsupplierinacontinuousreviewinventorysystem AT axsatersven onthevalueofcustomerinformationforanindependentsupplierinacontinuousreviewinventorysystem |