DEPARTEMENT TOEGEPASTE ECONOMISCHE WETENSCHAPPEN

摘要: 1. Introduction Inventory is used to provide a service to the customer, ie to give an immediate source of supply, and to buffer the production system from fluctuations in demand, but the prevalence of the bullwhip effect (Lee Padmanabhan and Whang, 1997a and b) in industry suggests that this benefit is often lost (Baganha and Cohen, 1998). Both marketing and production executives clearly have a fundamental interest in inventory. Marketing will wish to set inventory levels to ensure a suitable customer service level. Additionally, production executives wish to use the inventory to reduce the" strain" on the production system resulting from the uncertain demand. These strains manifest themselves as lost capacity, transport and subcontracting premiums, over and undertime labour, training, and quality issues. The fmancial implications of these problems are often hard to determine, although academia and management have realised for a long time the benefit of designing replenishment rules to control inventory levels, maintain customer service and set production targets, see Magee (1956) and, Deziel and Eilon (1967) and Graves (1999). In reality a qualitative judgement is often taken by executives to manage the trade-off between bullwhip, inventory holding and backlog costs whilst aligning the service proposition to the market place. The replenishment rule contributes to both the inventory levels and the production rates 1 of a product. The key to designing a good replenishment rule is to balance the inventory and production costs whilst ensuring a customer service level. In simple terms it is easy to visualise that we can" buy" a smoothed production …