Article ID: | iaor20133582 |
Volume: | 144 |
Issue: | 1 |
Start Page Number: | 290 |
End Page Number: | 300 |
Publication Date: | Jul 2013 |
Journal: | International Journal of Production Economics |
Authors: | Hung Yi-Feng, Hsiao Jui-Yi |
Keywords: | decision, stochastic processes, demand, programming: dynamic |
This study considers an inventory rationing problem in which a warehouse maintains inventory to meet various future requests that are classified into a discrete number of priorities. When there is limited inventory quantity in the warehouse, we prefer to fulfill higher priority requests over lower priority requests. When a low priority request does arrive, the warehouse may need to reject the request and reserve the inventory for later higher priority requests. However, we would rather satisfy lower priority requests than have inventory leftover when the replenishment arrives. To face uncertain request arrivals during an uncertain replenishment lead time, we develop two rationing approaches,