Articles

Inventory allocation models for a two-stage, twoproduct, capacitated supplier and retailer problem with random demand

K. LUO, R. BOLLAPRAGADA, L. KERBACHE

International Journal of Production Economics

A paraître

Départements : Information Systems and Operations Management, GREGHEC (CNRS)

Mots clés : supply chain management, inventory management, capacity allocation, heuristic methods

http://ac.els-cdn.com/S0925527316303930/1-s2.0-S0925527316303930-main.pdf?_tid=e3dcdf78-c36d-11e6-ab1d-00000aacb362&acdnat=1481878922_0f8e1cce572aa5799576c97c7d14f216


The objective of this research is to develop an optimal inventory allocation methodology for a supply chain consisting of a capacitated retailer with limited shelf space, and two unreliable capacitated suppliers in an uncertain environment. We develop conceptual and analytical models that provide allocation preferences between shelf-space and warehouse in both deterministic and stochastic demand cases, and develop managerial insights based on them. For each case, we provide both a closed-form solution and a heuristic method, and illustrate the bounds on the optimal solution. Further, we show that the cost function is L-convex in some cases. Finally, we prove that the expected profit decreases as the variance of demand increases


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