Paper Info
Title
The Residual Time Approach For (Q, R) Model Under Perishability, General Lead Times, And Lost Sales
Abstract
We consider a (Q, r) perishable inventory system with state-dependent compound Poisson demands with a random batch size, general lead times, exponential shelf times, and lost sales. We assume r < Q and analyze the system using an embedded Markov process at the replenishment points. Using the queueing and Markov chain decomposition approach, we characterize the distribution of the residual lead time and derive the stationary distribution of the inventory level. We construct closed-form expressions for the expected total long-run average cost function. The closed form allows us to efficiently obtain, numerically, the optimal Q and r parameters. Numerical study provides several guidelines for the optimal control. For example, we show that approximating the lead time distribution by an exponential one only works when the optimal reorder point of the approximation is very small; in other cases the usage of the exact distribution can lead to substantial cost savings (up to 14%). We further provide intuition insight on the optimal controls and how they depend on different factors, e.g., the lead time variability, and the demand features (arrival rate, size and variability).
Year
DOI
Venue
2020
10.1007/s00186-020-00717-7
MATHEMATICAL METHODS OF OPERATIONS RESEARCH
Keywords
DocType
Volume
Queueing, (Q, r) policy, Uncertainty, Perishability, Lost sales
Journal
92
Issue
ISSN
Citations 
3
1432-2994
0
PageRank 
References 
Authors
0.34
0
2
Name
Order
Citations
PageRank
Yonit Barron100.68
Opher Baron214514.64