The value of advance demand information in production/inventory systems

Abstract

Advance demand information, when used effectively, improves the performance of produc- tion/inventory systems. In this paper, we investigate the value of advance demand information in pro- duction/inventory systems. For a single-stage make-to-stock queue, we assess the value of using advance demand information under a variety of assumptions on the cost of obtaining advance demand information, and the delivery timing requirements. This analysis enables us to identify conditions under which advance demand information may bring significant benefits.