Using Dynamic Programming-Based Dss to Manage Inventory at Jeppesen

Interfaces, Vol. 31, No. 6, pp. 54-65, November/December 2001

12 Pages Posted: 28 Mar 2005

See all articles by Elena Katok

Elena Katok

University of Texas at Dallas

Andrew Lathrop

Accenture Corporation - Capability Modeling and Simulation

William Tarantino

Center for Army Analysis

Susan H. Xu

Pennsylvania State University, University Park - Department of Supply Chain and Information Systems

Abstract

We developed a system for managing inventory at Jeppesen Sanderson, Inc., a major provider of aviation-information products. The system determines order quantities for charts used in flight manuals. These charts contain essential safety information that changes frequently, making standard methods for inventory management ineffective. We formulated the problem as a dynamic programming model and developed a simple heuristic-solution procedure for determining order quantities. Based on this procedure, we also developed a decision support system (DSS) and implemented it for 600 of the most expensive Jeppesen charts. The system has been in use since August 1998, generating actualannualcost reductions of over $800,000.

Keywords: Dynamic programming, applications, inventory/production, perishable, aging items

Suggested Citation

Katok, Elena and Lathrop, Andrew and Tarantino, William and Xu, Susan H., Using Dynamic Programming-Based Dss to Manage Inventory at Jeppesen. Interfaces, Vol. 31, No. 6, pp. 54-65, November/December 2001, Available at SSRN: https://ssrn.com/abstract=673462

Elena Katok (Contact Author)

University of Texas at Dallas ( email )

Jindal School of Management
800 W. Campbell Dr.
Richardson, TX 75080
United States

HOME PAGE: http://www.utdallas.edu/~ekatok/

Andrew Lathrop

Accenture Corporation - Capability Modeling and Simulation ( email )

161 North Clark Street
Chicago, IL 60601
United States

William Tarantino

Center for Army Analysis ( email )

6001 Goethals Road
Fort Belvoir, VA 22060
United States

Susan H. Xu

Pennsylvania State University, University Park - Department of Supply Chain and Information Systems ( email )

University Park
State College, PA 16802
United States

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