Journal of the Korean Operations Research and Management Science Society (한국경영과학회지)

The Korean Operations Research and Management Science Society (한국경영과학회)
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Demand Variability Impact on the Replenishment Policy in a Two-Echelon Supply Chain Model

두 계층 공급사슬 모형에서 발주정책에 대한 수요 변동성 영향

  • 김은갑 (이화여자대학교 경영대학 경영학)
  • Published : 2004.09.01
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Abstract

We consider a supply chain model with a make-to-order production facility and a single supplier. The model we treat here is a special case of a two-echelon inventory model. Unlike classical two-echelon systems, the demand process at the supplier is affected by production process at the production facility as well as customer order arrival process. In this paper, we address that how the demand variability impacts on the optimal replenishment policy. To this end, we incorporate Erlang and phase-type demand distributions into the model. Formulating the model as a Markov decision problem, we investigate the structure of the optimal replenishment policy. We also implement a sensitivity analysis on the optimal policy and establish its monotonicity with respect to system cost parameters.

Keywords

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