Using imperfect advance demand information in ordering and rationing decisions

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dc.citation.epage677en_US
dc.citation.issueNumber2en_US
dc.citation.spage665en_US
dc.citation.volumeNumber121en_US
dc.contributor.authorTan, T.en_US
dc.contributor.authorGüllü, R.en_US
dc.contributor.authorErkip, N.en_US
dc.date.accessioned2016-02-08T10:02:25Z
dc.date.available2016-02-08T10:02:25Z
dc.date.issued2009en_US
dc.departmentDepartment of Industrial Engineeringen_US
dc.description.abstractIn this paper, we consider an inventory problem with two demand classes having different priorities. The appropriate policy of rationing the available stock, i.e. reserving some stock for meeting prospective future demand of preferred customers at the expense of deliberately losing some of the currently materialized demand of lower demand class(es), relies on the estimation of the future demand. Utilizing current signals on future demand, which we refer to as imperfect advance demand information (ADI), decreases uncertainty on future demand and may help to make better decisions on when to start rejecting lower class demand. We develop a model that incorporates imperfect ADI with inventory ordering (replenishment) decision and rationing available stock. In a two-period setting, we show some structural properties, solve the rationing problem, and propose solution methods based on Monte Carlo simulation for the ordering problem. We conduct numerical tests to measure the impact of system parameters on the expected value of imperfect ADI, and provide useful managerial insights.en_US
dc.description.provenanceMade available in DSpace on 2016-02-08T10:02:25Z (GMT). No. of bitstreams: 1 bilkent-research-paper.pdf: 70227 bytes, checksum: 26e812c6f5156f83f0e77b261a471b5a (MD5) Previous issue date: 2009en
dc.identifier.doi10.1016/j.ijpe.2009.04.025en_US
dc.identifier.issn0925-5273
dc.identifier.urihttp://hdl.handle.net/11693/22612
dc.language.isoEnglishen_US
dc.publisherElsevieren_US
dc.relation.isversionofhttp://dx.doi.org/10.1016/j.ijpe.2009.04.025en_US
dc.source.titleInternational Journal of Production Economicsen_US
dc.subjectInventory/productionen_US
dc.subjectAdvance demand informationen_US
dc.subjectCustomer reliabilityen_US
dc.subjectPeriodic reviewen_US
dc.subjectDemand classesen_US
dc.subjectRationingen_US
dc.titleUsing imperfect advance demand information in ordering and rationing decisionsen_US
dc.typeArticleen_US

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