On the effect of variability and uncertainty in advance demand information on the performance of a make-to-stock supplier
Part of : MIBES Transactions : international journal ; Vol.2, No.1, 2008, pages 95-114
Issue:
Pages:
95-114
Abstract:
Our aim in this paper is to investigate how variability and uncertainty in advance demand information (ADI) affects the performance of a make-to-stock supplier. To this end, we develop a model of a supplier who receives orders for one item at a time from customers that may belong to one of two classes. Each customer in the first class requests immediate delivery, and hence provides no ADI at all. Each customer in the second class makes a cancelable reservation in advance of his requested due date, and hence provides uncertain ADI. We assume that the supplier uses an order base stock replenishment policy with a release lead time. According to this policy, each customer order triggers the potential placement of a replenishment order by the supplier at a time that is determined by offsetting the demand due date by a fixed planned supply lead time. The replenishment order is actually placed only if there have been fewer cancellations that replenishment orders in the past; otherwise, it is skipped. We investigate via simulation the impact of important ADI related parameters on the optimal decision variables and performance of the replenishment policy, for four different variations of the model. In each variation, the replenishment (or supply) process is represented by a different queueing system. The systems that we consider are the M/M/1, M/D/1, M/M/∞, and M/D/∞ queues, respectively.
Subject (LC):
Keywords:
capacitated/uncapacitated supplier, make-to-stock queue, advance demand information, order base stock policy
Notes:
Περιέχει σχήματα, πίνακες και βιβλιογραφία
