Universität zu Köln

Hoeller, Simon J., Oezsen, Raik and Thonemann, Ulrich W. (2020). Determining optimal parameters for expediting policies under service level constraints. Eur. J. Oper. Res., 281 (2). S. 274 - 286. AMSTERDAM: ELSEVIER. ISSN 1872-6860

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Abstract

Order expediting is an inventory control practice that allows companies to reduce inventory while maintaining service levels. However, expediting outstanding orders is costly and a trade-off must be made between expediting orders and holding inventory. We model the problem as a periodic-review inventory system with the option to move outstanding units forward in the replenishment pipeline. The objective is to minimize the sum of expected inventory holding and expediting costs per period subject to a minimum expected service level constraint. We consider a generalized base-stock policy where outstanding units are expedited when the inventory level drops below a certain threshold. We develop structural properties and present an efficient procedure to determine the optimal policy parameters. In a numerical study with real-world data, we show that our expediting policy offers substantial savings compared to other policies. We also provide managerial insights by numerically analyzing how the model parameters impact the savings. (C) 2019 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Hoeller, Simon J. UNSPECIFIED UNSPECIFIED UNSPECIFIED Oezsen, Raik UNSPECIFIED UNSPECIFIED UNSPECIFIED Thonemann, Ulrich W. UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-343734
DOI:	10.1016/j.ejor.2019.08.028
Journal or Publication Title:	Eur. J. Oper. Res.
Volume:	281
Number:	2
Page Range:	S. 274 - 286
Date:	2020
Publisher:	ELSEVIER
Place of Publication:	AMSTERDAM
ISSN:	1872-6860
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language INVENTORY SYSTEM; MANAGEMENT Multiple languages Management; Operations Research & Management Science Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/34373