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OUT strategy and application to supply chain networks

OUT strategy and application to supply chain networks In this paper, firstly we consider a more realistic Order-Up-To (OUT) strategy usually adopted by many managers which includes the variable desired inventory and the desired Work In Process (WIP) that are both proportional to the expected demand. Then, we investigate the stability properties of an order-inventory system applying this realistic OUT strategy and give appropriate managing strategies. Moreover, we consider this realistic OUT strategy in a typical one-dimensional supply network model, as the stability characteristics are the base of reforming the supply chain networks. By linear stability analysis, we find that the whole supply chain network will be stable in a certain space of the parameters and may exhibit unstable behaviour in another parameters space. Therefore, managers must be careful to modulate their order and inventory policies to increase the stability of their supply chain networks. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Services Operations and Informatics Inderscience Publishers

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1741-539X
eISSN
1741-5403
Publisher site
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Abstract

In this paper, firstly we consider a more realistic Order-Up-To (OUT) strategy usually adopted by many managers which includes the variable desired inventory and the desired Work In Process (WIP) that are both proportional to the expected demand. Then, we investigate the stability properties of an order-inventory system applying this realistic OUT strategy and give appropriate managing strategies. Moreover, we consider this realistic OUT strategy in a typical one-dimensional supply network model, as the stability characteristics are the base of reforming the supply chain networks. By linear stability analysis, we find that the whole supply chain network will be stable in a certain space of the parameters and may exhibit unstable behaviour in another parameters space. Therefore, managers must be careful to modulate their order and inventory policies to increase the stability of their supply chain networks.

Journal

International Journal of Services Operations and InformaticsInderscience Publishers

Published: Jan 1, 2006

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