Course – Advanced Inventory Theory

October 30, 2019 10.00 - 16.00 h

Objectives

  • Students will learn an exact analysis for relatively simple but fundamental inventory models
  • Students will learn what can be done via approximate performance evaluation when an exact performance evaluation is not possible.
  • Students will learn about heuristics for cases where an exact optimization is not possible or has a too high computational complexity.
  • Students will be exposed to recent papers and open research problems.

 Course description
We discuss two types of inventory models:

  1. Single-location inventory models for inventories in general,
  2. Spare parts inventory models.

The first part will be mainly based on chapters of the book of Axsäter (2015). We start with various single-location, single-item inventory models, and analyze e.g. base stock policies, (r,Q) policies, and (s,S) policies. Next, we study a setting with multiple inventory items and joint ordering costs (the well-known “joint replenishment problem”. We present heuristic as well as exact approaches to the problem, both in a deterministic and stochastic setting. Finally, we consider models for multiple demand classes and show that under certain conditions critical level policies are optimal. We present algorithms for finding the optimal critical level policy for multiple demand classes.The second part will be based on Chapters 3, 5 and 6 of the book of Van Houtum and Kranenburg (2015). In spare parts inventory problems, the focus is generally on the system availabilities of the machines for which spare parts are taken on stock. This leads to multi-item inventory models with various types of system-oriented service level constraints. We show how to derive efficient solutions in a single-location setting with one type of customers, and we formulate heuristics. Next, we study a single-echelon, multi-location setting with lateral transshipments and a two-echelon distribution setting (the “METRIC model”). We also show how these models can be and actually are applied in practice. Finally, we connect the single-echelon, multi-location model to settings for internet sales, library books, and ambulance services.We use two course days per part. The first course day is used to present the existing theory while the second course day is focused on recent papers and open research problems.Connection with the course “Quantitative Modelling and Analysis of Supply Chains QMASC)”:

The latter course is about inventories in general and as such mainly related to our first part. While we focus on single-location models, and especially in settings with multiple items and joint replenishment costs and with multiple demand classes, the course QMASC has a focus on multi-echelon production/inventory systems.

More detailed information on the course in the attached program below.

Lecturer: Prof. Rommert Dekker & Prof. Geert-Jan van Houtum

Dates: 30 October, 10 November, 4 & 18 December 2019

Time: 10.00 – 16.00 h

Location: Utrecht, Boswell-Beta

Room: t.b.a.

ECTS: 1 (attendance only) – 4 (attendance & passing assignment)

Participation: free for TRAIL/Beta/OML members and PhD students of participating faculties

Registration: via the GP-OML website – click here

TRAIL OML Advanced Inventory Theory – Fall 2019

This course is part of the GP-OML program (www.GPOML.nl)

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