Serial production distribution systems under service constraints

Serial production distribution systems under service constraints

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Article ID: iaor2002170
Country: United States
Volume: 3
Issue: 1
Start Page Number: 43
End Page Number: 50
Publication Date: Jan 2001
Journal: Manufacturing & Service Operations Management
Authors: ,
Keywords: inventory
Abstract:

We analyze the problem of minimizing average inventory costs subject to fill-rate type of service-level constraints in serial and assembly production/distribution systems. We propose optimal and heuristic procedures to solve this problem. Our model and solution procedures can be used to manage the fill rate or fill rate within a ‘time window’ service measures. We also relate our service-constrained model to the traditional model with back-order costs and show that it is possible to prespecify backorder cost rates to achieve desired service levels. We explore the inventory cost impact of such a practice, and we find that the cost penalty can be very high.

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