Optimal Policy for a Periodic-Review Inventory System Under a Supply Capacity Contract

• Published in: Operations research Vol. 56; no. 1; pp. 59 - 68
• Main Authors: Chao, Xiuli, Zipkin, Paul H
• Format: Journal Article
• Language: English
• Published: Linthicum, MD INFORMS 01.01.2008; Institute for Operations Research and the Management Sciences
• Subjects: Analysis; Applied sciences; Business orders; Capacity costs; Contracts; convexity; Cost efficiency; Cost functions; Costs; dynamic programming; Exact sciences and technology; Fixed costs; Heuristic; Heuristics; incentives; Inventories; Inventory control; Inventory control, production control. Distribution; K; Logistics; Manufacturers; Mathematical models; Minimization of cost; Operational research and scientific management; Operational research. Management science; optimal control; Optimal policy; Order quantity; periodic-review inventory systems; Poisson distribution; policies; Production control; s, S; Studies; Suppliers; United States; Fixed cost; Optimal policy; Periodicity; Modeling; Periodic control; Delivery (good); Production management; periodic-review inventory systems; optimal control; s; Quota; Lorry; Optimal control; Economic order quantity; Heuristic method; Ordering; Cost function; Inventory control; Convex function; Convexity; Dynamic programming; S policies; K-convexity; incentives; dynamic programming; Contract; Logistics

Transportation and production contracts often specify the frequency and volume reserved by the supplier for a particular customer's deliveries. This practice motivated Henig et al. (Henig, M., Y. Gerchak, R. Ernst, D. Pyke. 1997. An inventory model embedded in designing a supply contract. Manag...