Paper Info
Title
On the value of customer information for an independent supplier in a continuous review inventory system.
Abstract
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. (C) 2012 Elsevier B.V. All rights reserved.
Year
DOI
Venue
2012
10.1016/j.ejor.2012.03.022
European Journal of Operational Research
Keywords
Field
DocType
Supply chain management,Erlangian demand,Continuous review system,Optimal no-information policy,Value of information,Inventory
Customer retention,Markov process,Supplier relationship management,Reorder point,Customer to customer,Supply chain management,Customer profitability,Value of information,Mathematics,Operations management
Journal
Volume
Issue
ISSN
221
2
0377-2217
Citations 
PageRank 
References 
2
0.37
6
Authors
2
Name
Order
Citations
PageRank
Sven Axsäter1836.85
S. Viswanathan212612.32