Publication: Stochastic models for the coordinated production and shipment problem in a supply chain
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KU-Authors
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Abstract
In this study, we consider the coordination of transportation and production policies between a single supplier and a single retailer in a stochastic environment. The supplier controls the production, holds inventory and ships the products to the retailer to satisfy the external demand. We model the system as a Markov decision process, and show that the optimal production and transportation decisions are complex and non-monotonic. Therefore, we analyze two widely-used shipment policies in the industry as well, namely time-based and quantity-based shipment policies in addition to a hybrid time-and-quantity based shipment policy. We numerically compare the performances of these policies with respect to the optimal policy and analyze the effects of the parameters in the system.
Source
Publisher
Pergamon-Elsevier Science Ltd
Subject
Computer science, Engineering, Industrial engineering
Citation
Has Part
Source
Computers and Industrial Engineering
Book Series Title
Edition
DOI
10.1016/j.cie.2012.12.012