Jeppesen uses a dynamic-programming-based decision support system to manage inventory

Jeppesen uses a dynamic-programming-based decision support system to manage inventory

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Article ID: iaor2003377
Country: United States
Volume: 31
Issue: 6
Start Page Number: 54
End Page Number: 65
Publication Date: Nov 2001
Journal: Interfaces
Authors: , , ,
Keywords: inventory, production
Abstract:

We developed a system for managing inventory at Jeppesen Sanderson, Inc., a major provider of aviation-information products. The system determines order quantities for charts used in flight manuals. These charts contain essential safety information that changes frequently, making standard methods for inventory management ineffective. We formulated the problem as a dynamic programming model and developed a simple heuristic-solution procedure for determining order quantities. Based on this procedure, we also developed a decision support system and implemented it for 600 of the most expensive Jeppesen charts. The system has been in use since August 1998, generating actual annual cost reductions of over $800,000.

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