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dc.contributor.author Shang, KH
dc.contributor.author Zhou, SX
dc.contributor.author Van Houtum, GJ
dc.date.accessioned 2011-06-21T17:31:01Z
dc.date.issued 2010-06-01
dc.identifier.citation Manufacturing and Service Operations Management, 2010, 12 (3), pp. 430 - 448
dc.identifier.issn 1523-4614
dc.identifier.uri http://hdl.handle.net/10161/4431
dc.description.abstract In some supply chains, materials are ordered periodically according to local information. This paper investigates how to improve the performance of such a supply chain. Specifically, we consider a serial inventory system in which each stage implements a local reorder interval policy; i.e., each stage orders up to a local basestock level according to a fixed-interval schedule. A fixed cost is incurred for placing an order. Two improvement strategies are considered: (1) expanding the information flow by acquiring real-time demand information and (2) accelerating the material flow via flexible deliveries. The first strategy leads to a reorder interval policy with full information; the second strategy leads to a reorder point policy with local information. Both policies have been studied in the literature. Thus, to assess the benefit of these strategies, we analyze the local reorder interval policy. We develop a bottom-up recursion to evaluate the system cost and provide a method to obtain the optimal policy. A numerical study shows the following: Increasing the flexibility of deliveries lowers costs more than does expanding information flow; the fixed order costs and the system lead times are key drivers that determine the effectiveness of these improvement strategies. In addition, we find that using optimal batch sizes in the reorder point policy and demand rate to infer reorder intervals may lead to significant cost inefficiency. © 2010 INFORMS.
dc.format.extent 430 - 448
dc.language.iso en_US en_US
dc.relation.ispartof Manufacturing and Service Operations Management
dc.relation.isversionof 10.1287/msom.1090.0277
dc.title Improving supply chain performance: Real-time demand information and flexible deliveries
dc.title.alternative en_US
dc.type Journal Article
dc.description.version Version of Record en_US
duke.date.pubdate 2010-00-00 en_US
duke.description.endpage 448 en_US
duke.description.issue 3 en_US
duke.description.startpage 430 en_US
duke.description.volume 12 en_US
dc.relation.journal M&Som-Manufacturing & Service Operations Management en_US
pubs.issue 3
pubs.organisational-group /Duke
pubs.organisational-group /Duke/Fuqua School of Business
pubs.publication-status Published
pubs.volume 12
dc.identifier.eissn 1526-5498

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