Inventory control in supply chains: Alternative approaches to a two-stage lot-sizing problem

András Kovács, Péter Egri, T. Kis, J. Váncza

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

The principal challenge of inventory control in supply chains is that the interacting autonomous enterprises have to plan their production and logistics under information asymmetry, driven by different, often conflicting objectives. In this paper, four different computational approaches are investigated to cope with this challenge: decomposition, integration, coordination, and bilevel programming. The four approaches are applied to solving the same two-stage economic lot-sizing problem, and compared in computational experiments. The prerequisites of the approaches are analyzed, and it is shown that the profits realized and the costs incurred at the different parties largely depend on the solution approach applied. This research also resulted in a novel coordination mechanism, as well as a new algorithm for the bilevel optimization approach to the investigated lot-sizing problem. A specific goal of this study is to highlight the so far less recognized application potential of the coordination and the bilevel optimization approaches for controlling inventories in a supply chain.

Original languageEnglish
Pages (from-to)385-394
Number of pages10
JournalInternational Journal of Production Economics
Volume143
Issue number2
DOIs
Publication statusPublished - Jun 2013

Fingerprint

Inventory control
Supply chains
Logistics
Profitability
Decomposition
Economics
Costs
Industry
Experiments
Supply chain
Lot sizing

Keywords

  • Bilevel programming
  • Coordination
  • Integration
  • Inventory control
  • Supply chain

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering
  • Business, Management and Accounting(all)
  • Management Science and Operations Research
  • Economics and Econometrics

Cite this

Inventory control in supply chains : Alternative approaches to a two-stage lot-sizing problem. / Kovács, András; Egri, Péter; Kis, T.; Váncza, J.

In: International Journal of Production Economics, Vol. 143, No. 2, 06.2013, p. 385-394.

Research output: Contribution to journalArticle

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