Traditional Inventory Models in an E-Retailing Setting: A Two-Stage Serial System with Space Constraints
Name
IMST021.pdf
Size
110.61 KB
Format
Adobe PDF
Checksum (MD5)
0d8e20e1cd8b783371aec9744f570d88
Author(s)
Allgor, Russell
Graves, Stephen C.
Xu, Ping Josephine
Date Issued
January 2004
Series/Report no.
Innovation in Manufacturing Systems and Technology (IMST);
Abstract
In an e-retailing setting, the efficient utilization of inventory, storage space, and labor is paramount to achieving high levels of customer service and company profits. To optimize the storage space and labor, a retailer will split the warehouse into two storage regions with different densities. One region is for picking customer orders and the other to hold reserve stock. As a consequence, the inventory system for the warehouse is a multi-item two-stage, serial system. We investigate the problem when demand is stochastic and the objective is to minimize the total expected average cost under some space constraints. We generate an approximate formulation and solution procedure for a periodic review, nested ordering policy, and provide managerial insights on the trade-offs. In addition, we extend the formulation to account for shipping delays and advanced order information.
Subjects
inventory
multi-echelon
stochastic demand
periodic review
Persistent DSpace Link
