Abstract
We investigate the impact of order crossover on a periodic, order-up-to (R,S) inventory system where attaining a target service level is the focus. We first address two crossover related assumptions and then explore five methods of including crossover information into the process of determining the order-up-to level (S). We develop a hybrid discrete-event/continuous simulation model and perform a full-factorial simulation study under various conditions of target service level, demand variance, and lead-time variance. We find the method used to include crossover information into the decision significantly impacts service performance and that methods based on effective lead-time observations perform best.
Original language | English |
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Pages (from-to) | 312-330 |
Number of pages | 19 |
Journal | Transportation Research Part E: Logistics and Transportation Review |
Volume | 114 |
DOIs | |
State | Published - Jun 2018 |
Keywords
- Amazon effect
- Inventory
- Lead time
- Order crossover
- Service level
- Simulation