Please use this identifier to cite or link to this item:
http://hdl.handle.net/10397/89679
| Title: | Pre-positioning and deployment of reserved inventories in a supply network : structural properties | Authors: | Guo, P Liu, F Wang, Y |
Issue Date: | Apr-2020 | Source: | Production and operations management, Apr. 2020, v. 29, no. 4, p. 893-906 | Abstract: | We study a two‐stage decision problem, namely, the allocation and deployment of reserved inventories (RIs) in a supply network with random demand surges. The demand surge follows a time‐dependent stochastic process and our objective is to minimize the expected total unmet demand in the presence of positive transshipment lead times. We first solve the optimal deployment problem given that the demand surges have occurred at some locations. We show that the optimal deployment policy is a “nested” policy with respect to the shadow price at each location, where a shadow price represents the marginal reduction of the expected total unmet demand due to a marginal increase of RIs. Specifically, locations with higher shadow prices have higher priority in inventory allocation. We then consider the optimal allocation problem in the pre‐positioning stage. We show that under certain conditions the optimal allocation is increasing in the total amount of RIs. We introduce a new stochastic order for distributions defined on sets called the first‐order stochastic dominance and use it to show that the expected total unmet demand is higher when one of the following is true: the demand surges tend to occur simultaneously at more locations, the post‐surge delivery takes a longer time, more demand arrives earlier, or the demand has a higher volatility. | Keywords: | Supply network Demand surge Inventory planning Stochastic comparison |
Publisher: | Wiley-Blackwell | Journal: | Production and operations management | ISSN: | 1059-1478 | EISSN: | 1937-5956 | DOI: | 10.1111/poms.13142 | Rights: | © 2019 Production and Operations Management Society This is the peer reviewed version of the following article: Guo, P., Liu, F. and Wang, Y. (2020), Pre-positioning and Deployment of Reserved Inventories in a Supply Network: Structural Properties. Prod Oper Manag, 29: 893-906, which has been published in final form at https://doi.org/10.1111/poms.13142. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. |
| Appears in Collections: | Journal/Magazine Article |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| Guo_Pre-Positioning_Reserved_Inventories.pdf | Pre-Published version | 1.02 MB | Adobe PDF | View/Open |
Access
View full-text via PolyU eLinks 
Page views
29
Last Week
0
0
Last month
Citations as of May 28, 2023
Downloads
2
Citations as of May 28, 2023
SCOPUSTM
Citations
4
Citations as of May 25, 2023
WEB OF SCIENCETM
Citations
6
Citations as of May 25, 2023
Google ScholarTM
Check
Altmetric
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.