An extension of the reorder point method by using advance demand spike information

Herbert Jodlbauer, Matthias Dehmer

Research output: Contribution to journalArticlepeer-review

Abstract

This article addresses a reorder point method with an extended inventory position. The inventory position is decreased by near future known demand spikes. This advance demand information helps to improve the performance of the reorder point method. The proposed extension leads to a hybrid model: make-to-stock for demand less than the spike threshold and make-to-order for demand greater than the spike threshold. Furthermore, the number of cycles is modeled more generally and takes into account that the replenishment order has lot-size Q or an integer multiple of Q. An iterative solution procedure is developed for the proposed model, and the numerical results are shown to underpin the usefulness of the approach.

Original languageEnglish
Article number105055
JournalComputers and Operations Research
Volume124
DOIs
Publication statusPublished - Dec 2020

Keywords

  • Advance demand information
  • Demand spike
  • Integer multiple lot-size
  • Reorder point

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