Research Information System
1996 Manufacturing and Service Operations Management Conference (1996 MSOM), Hanover, Canada, 24 - 25 June 1996, pp.341-346
We consider a situation where each of several customers has deterministic demands, in each of several periods in the future, for a single bulk good. The supplier ships this good using trucks, with each truck carrying a full load. Transit times are affected by weather, the conditions of the roads, and other non-controllable factors. We study the problem of how many trucks to dispatch to a given customer in each time period with the goal of minimizing the total expected cost of procurement, inventory holding costs, and shortage costs. The possibility of salvaging excess inventory is also considered. We analyze a few simple models to develop an understanding of the properties of the optimal solution.