Paper Info
Title
A robust (r, Q) policy for a simple VMI system with inventory inaccuracy and time-delay
Abstract
Inventory record inaccuracy has significant negative impacts on the performance of inventory management. For example, it usually leads to high holding cost or large backlog penalty. To hedge against it, we investigate the robust replenishment problem for a one-vendor-and-one-retailer vendor managed inventory (VMI) system with inventory inaccuracy. The objective of this research is to minimize the average cost of the retailer, including the transportation cost, the inventory holding cost and the backlog penalty. First, we show how to compute the probability distribution of the physical inventory level in the future periods. Based on this probability distribution, the expected inventory cost (EIC) of the retailer is defined. Then a robust (r, Q) policy that is insensitive to inventory inaccuracy is proposed. Finally, numerical experiments are conducted to examine the performance of the proposed robust policy for hedging against inventory inaccuracy; and sensitivity analysis is carried out to study how the parameters of the system affect the average cost.
Year
DOI
Venue
2014
10.1109/CoASE.2014.6899397
CASE
Keywords
Field
DocType
backlog penalty,statistical distributions,inventory management,physical inventory level,inventory record inaccuracy,time-delay,inventory holding cost,delays,expected inventory cost,vmi system,one-vendor-and-one-retailer vendor managed inventory system,eic,probability distribution,transportation cost,minimisation,robust replenishment problem,cost reduction,automation,computer aided software engineering
Vendor-managed inventory,Inventory theory,Perpetual inventory,Computer science,Holding cost,Operations research,Cycle count,Average cost,Probability distribution,Stock-taking,Marketing
Conference
Citations 
PageRank 
References 
0
0.34
5
Authors
3
Name
Order
Citations
PageRank
Ming Li171.84
Felix T. S. Chan21267113.20
Zheng Wang36412.16