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Author: | Sox, C. R. Thomas, L. J. McClain, J. O. |
Title: | Coordinating production and inventory to improve service |
Journal: | Management Science
1997 : SEP, VOL. 43:9, p. 1189-1197 |
Index terms: | PRODUCTION INVENTORIES OPERATIONAL RESEARCH SCHEDULING CAPACITY SERVICE |
Language: | eng |
Abstract: | The concept of a service window is common in practice and is crucial to the improvements demonstrated in this study. Even a short service window allows to keep zero inventory in low-demand items and still maintain good service by giving those orders priority. The priority policies degrade performance if the service window is too short compared to the average flow time of the factory. Using more information lowers the inventory required to achieve a high fill rate. An important analytical contribution of the study is the derivation of a model that not only represents the fill rate within t, but also yields optimal solutions for a variety of objectives. This model yields the surprising result that increasing the service window does not affect the allocation of base stocks, in addition to suggesting how to allocate base stocks optimally. |
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