Value of advance demand information in production and inventory systems with shared resources

Abstract

Investigating the benefits of Advance Demand Information (ADI) in production and inventory systems has been a significant research question in recent years. We view ADI as a general concept encompassing different types of future demand information: formal and subjective forecasts, early or advance orders and in general any signal providing information about future demand occurrences. Under this general definition, it is clear that ADI is has been around for a long time. It is therefore interesting that it was not modeled and investigated systematically for a long time in production/inventory control literature. It is likely that the recent increase in research effort was fueled by the information revolution which enabled more data and much easier analysis and exchange of such data. At the same time, models of production/inventory systems appear to have reached a maturity with well-established sophisticated tools for analysis. The combination of practical business needs and the existence of tools for analysis have rapidly generated a wide body of research in ADI applications in production/inventory systems.