Behavioral Decisions In Inventory Systems With Dual Sourcing Option

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Behavioral Decisions In Inventory Systems With Dual Sourcing Option

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Author : Tamás Csermely
language : en
Publisher:
Release Date : 2015

Behavioral Decisions In Inventory Systems With Dual Sourcing Option written by Tamás Csermely and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.

Dual sourcing practices have become increasingly popular with firms. To examine the actual behavior in such settings, we conducted a laboratory experiment with a multi-period single-echelon inventory model with a fast, expensive and a slow, inexpensive supplier. Compared to single-sourcing, the difference between the normatively achievable and the empirically realized cost decreases considerably. We find that the overusage of the fast supplier is driven by reference-dependent preferences. In general, subjects use order smoothing strategies and tend to choose a preferred supply mode. Furthermore, the individual variation in cognitive reflection drives cost differences: Subjects with a higher cognitive score have less random errors, order smoothing and supply line underweighting; they also overuse the fast option to a smaller extent. Our findings highlight the importance of having procurement professionals with a high cognitive reflection and the benevolent nature of the additional supply mode primarily due to its lower lead time.

Research Handbook On Inventory Management

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Author : Jing-Sheng J. Song
language : en
Publisher: Edward Elgar Publishing
Release Date : 2023-08-14

Research Handbook On Inventory Management written by Jing-Sheng J. Song and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-08-14 with Technology & Engineering categories.

This comprehensive Handbook provides an overview of state-of-the-art research on quantitative models for inventory management. Despite over half a century’s progress, inventory management remains a challenge, as evidenced by the recent Covid-19 pandemic. With an expanse of world-renowned inventory scholars from major international research universities, this Handbook explores key areas including mathematical modelling, the interplay of inventory decisions and other business decisions and the unique challenges posed to multiple industries.

Tailored Base Surge Policies In Dual Sourcing Inventory Systems With Demand Learning

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Author : Boxiao Chen
language : en
Publisher:
Release Date : 2019

Tailored Base Surge Policies In Dual Sourcing Inventory Systems With Demand Learning written by Boxiao Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.

We consider a periodic-review dual-sourcing inventory system, in which the expedited supplier is faster and more costly, while the regular supplier is slower and cheaper. Under full demand distributional information, it is well-known that the optimal policy is extremely complex but the celebrated Tailored Base-Surge (TBS) policy performs near optimally. Under such a policy, a constant order is placed at the regular source in each period, while the order placed at the expedited source follows a simple order-up-to rule. In this paper, we assume that the firm does not know the demand distribution a priori, and makes adaptive inventory ordering decisions in each period based only on the past sales (a.k.a. censored demand) data. The standard performance measure is regret, which is the cost difference between a feasible learning algorithm and the clairvoyant (full-information) benchmark. When the benchmark is chosen to be the (full-information) optimal Tailored Base-Surge policy, we develop the first nonparametric learning algorithm that admits a regret bound of O(T^{1/2} (log T)^{3} loglog T), which is provably tight up to a logarithmic factor. Leveraging the structure of this problem, our approach combines the power of bisection search and stochastic gradient descent and also involves a delicate high probability coupling argument between our and the clairvoyant optimal system dynamics. We also develop several technical results that are of independent interest.

Dual Sourcing With Unreliable Suppliers In A Continuous Review Inventory Systems

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Author : Jose Nicolas Robayo Bargans
language : en
Publisher:
Release Date : 2006

Dual Sourcing With Unreliable Suppliers In A Continuous Review Inventory Systems written by Jose Nicolas Robayo Bargans and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.

Multiple Sourcing In Single And Multi Echelon Inventory Systems

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Author : Steffen T. Klosterhalfen
language : en
Publisher:
Release Date : 2010

Multiple Sourcing In Single And Multi Echelon Inventory Systems written by Steffen T. Klosterhalfen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.

Behavioral Inventory Management

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Author : Andrew M. Davis
language : en
Publisher:
Release Date : 2021

Behavioral Inventory Management written by Andrew M. Davis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.

Behavioral inventory-management research leverages ideas and methodologies commonly used in behavioral economics and psychology to advance our understanding of the role of human behavior in inventory management. In this chapter, we first review some of the early papers in this area organized by problem setting. We describe the history and notable papers in the two largest streams: the newsvendor and serial supply chain settings. We then discuss how behavioral science can advance inventory research by describing three different pathways for improving inventory performance: correcting sub-optimal decision behavior, responding to others' behavioral patterns, and designing processes and systems for behavioral regularities. For each pathway, we provide recent examples from the literature. We conclude by discussing contemporary research opportunities in this sub-field involving other types of human decisions, beyond the inventory decisions typically considered.

Behavioral Issues In Operations Management

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Author : Ilaria Giannoccaro
language : en
Publisher: Springer Science & Business Media
Release Date : 2013-01-10

Behavioral Issues In Operations Management written by Ilaria Giannoccaro and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-01-10 with Technology & Engineering categories.

Behavioral Operations Management has been identified in the last years as one of the most promising emerging fields in Operations Management. Behavioral Issues in Operations Management explains and examines up-to-date research in this field, which works to analyze the impact of human behavior on the management of complex operating systems. A collection of studies from leading scholars presents different methodologies and approaches, supported by real data and case studies. Issues such as building trust and strong cooperative relationships with suppliers, enhancing motivation and designing proper incentives for stimulating more effective decision maker behaviours are considered. The main decision-making processes affected by behavioral issues are also analyzed with a focus on new product development, logistics, and supply chain integration. The broad coverage of methodologies and practical implications makes Behavioral Issues in Operations Management an ideal reference for both researchers developing new topics such as NK fitness landscapes and managers with an interest in behavioral management operations.

On The Performance Of Tailored Base Surge Policies

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Author : Linwei Xin
language : en
Publisher:
Release Date : 2017

On The Performance Of Tailored Base Surge Policies written by Linwei Xin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.

Problem Definition: Many import items sold at Walmart.com have two suppliers: one is faster and has a random production capacity limit while the other is slower and has infinite capacity. The lead time difference of the two suppliers could be as large as 12 weeks. Walmart.com faces an important and challenging supply chain problem and must make routine inventory replenishment decisions.Academic/Practical Relevance: Dual-sourcing inventory models have been extensively studied in academia and dual-sourcing strategies have been widely implemented in practice. Recently, the so-called Tailored Base-Surge (TBS) policy has begun to receive more attention and demonstrated good performance in existing dual-sourcing models. TBS is intuitive and easy to manage: a constant-order is placed from the slow (regular) supplier every period and a base-stock policy is adapted from the fast (express) supplier. Methodology: This paper develops a new dual-sourcing inventory model incorporating large lead time difference as well as random capacity of the express supplier, and investigates the performance of TBS both theoretically and empirically by using Walmart's data.Results: We prove that a TBS policy is asymptotically optimal as the regular lead time grows, extending the previous asymptotic optimality of TBS policies in the dual-sourcing system without random capacities. We complement the theory and compare TBS with three well-known heuristics in a “simulated” real-world setting through model calibration by using historical sales data from Walmart.com. Our results demonstrate that TBS outperforms others as for minimizing the long-run average inventory cost. In particular, the inventory cost would be reduced by at least 33% if adapting a TBS policy. Our results also suggest that at an aggregate level, TBS could reduce Weeks of Supply by 2.7 weeks while increasing Met Demand by 3.3% compared with the single-sourcing policy using only the import supplier.Managerial Implications: Our results show that if the proposed dual-sourcing model and algorithm are adapted, Walmart's inventory system would be significantly improved especially for import items.

Optimization Problems And Their Applications

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Author : Anton Eremeev
language : en
Publisher: Springer
Release Date : 2018-06-29

Optimization Problems And Their Applications written by Anton Eremeev and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-06-29 with Computers categories.

This book constitutes extended, revised and selected papers from the 7th International Conference on Optimization Problems and Their Applications, OPTA 2018, held in Omsk, Russia in July 2018. The 27 papers presented in this volume were carefully reviewed and selected from a total of 73 submissions. The papers are listed in thematic sections, namely location problems, scheduling and routing problems, optimization problems in data analysis, mathematical programming, game theory and economical applications, applied optimization problems and metaheuristics.

Typology And Literature Review On Multiple Supplier Inventory Control Models

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Author : Josef Svoboda
language : en
Publisher:
Release Date : 2019

Typology And Literature Review On Multiple Supplier Inventory Control Models written by Josef Svoboda and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.

This paper presents a typology and classifies the literature on inventory models with multiple sourcing options. The categories for classification include the number of considered echelons, the source of uncertainty, the model structure, as well as the general research approach. By means of the classification, the existing research is reviewed and insights and gaps are identified. The literature shows that stochasticity, constraints, cost structures and lead times have a significant impact on the sourcing decision. High demand volatility as well as high uncertainty in the lead time, yield or disruption of a primary source indicates a significant value of a second, reliable, fast but more expensive source. The same is true if a buyer has limited storage space or if the primary supplier is constrained in capacity or order size. If the emergency supplier has a minimum order requirement or the buyer is limited financially, the opposite is true and single sourcing is viable. Furthermore, besides a small emergency cost premium, large lead time differences between suppliers and short emergency lead times favor multiple sourcing. The review identifies several research gaps. Firstly, one important gap is on multi-echelon supply chain structures. Secondly, simple policy structures for more realistic and complex problem settings with multiple suppliers, multiple decision criteria and multiple, possibly correlated, sources of uncertainty should be investigated. Lastly, data driven approaches in industry applications could be a focal point of future research efforts.