Information Updated Supply Chain with Service-Level Constraints

Journal of Industrial And Management Optimization, Vol. 1, No. 4, pp. 513-531, November 2005

19 Pages Posted: 27 Feb 2008 Last revised: 22 Mar 2008

See all articles by Suresh Sethi

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Houmin Yan

The Chinese University of Hong Kong (CUHK) - Department of Systems Engineering & Engineering Management

Hanqin Zhang

Chinese Academy of Sciences (CAS) - Academy of Mathematics and Systems Sciences

Jing Zhou

University of North Carolina (UNC) at Charlotte

Abstract

We study a single-period two-stage service-constrained supply chain with an information update. The buyer has two purchasing instances: before and after the forecast update. The procurement cost at the second stage is uncertain at the first stage. We determine the optimal ordering policy with two service constraints (a service constraint is imposed for each procurement stage) and discuss the impact of the forecast quality. Finally, we extend our model to a multi-period problem with two ordering stages in each period.

Keywords: supply chain, information update, customer service level,dynamic programming, forecasting, signalling,

JEL Classification: C61, M11

Suggested Citation

Sethi, Suresh and Yan, Houmin and Zhang, Hanqin and Zhou, Jing, Information Updated Supply Chain with Service-Level Constraints. Journal of Industrial And Management Optimization, Vol. 1, No. 4, pp. 513-531, November 2005. Available at SSRN: https://ssrn.com/abstract=1098935

Suresh Sethi (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

800 W. Campbell Road, SM30
Richardson, TX 75080-3021
United States

Houmin Yan

The Chinese University of Hong Kong (CUHK) - Department of Systems Engineering & Engineering Management ( email )

Shatin, New Territories
Hong Kong

Hanqin Zhang

Chinese Academy of Sciences (CAS) - Academy of Mathematics and Systems Sciences ( email )

Zhong-Guan-Cun-Dong-Lu 55, Haidian District
Beijing, Beijing 100080
China

Jing Zhou

University of North Carolina (UNC) at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States

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