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dc.contributor.authorBoute, Robert
dc.contributor.authorDisney, Stephen M.
dc.contributor.authorLambrecht, Marc
dc.contributor.authorVan Houdt, Benny
dc.date.accessioned2017-12-02T14:52:16Z
dc.date.available2017-12-02T14:52:16Z
dc.date.issued2014
dc.identifier.doi10.1016/j.ejor.2013.06.036
dc.identifier.urihttp://hdl.handle.net/20.500.12127/4701
dc.description.abstractWe consider a supply chain in which orders and lead times are linked endogenously, as opposed to assuming lead times are exogenous. This assumption is relevant when a retailer’s orders are produced by a supplier with finite capacity and replenished when the order is completed. The retailer faces demands that are correlated over time – either positively or negatively – which may, for example, be induced by a pricing or promotion policy. The auto-correlation in demand affects the order stream placed by the retailer onto the supplier, and this in turn influences the resulting lead times seen by the retailer. Since these lead times also determine the retailer’s orders and its safety stocks (which the retailer must set to cover lead time demand), there is a mutual dependency between orders and lead times. The inclusion of endogenous lead times and autocorrelated demand represents a better fit with real-life situations. However, it poses some additional methodological issues, compared to assuming exogenous lead times or stationary demand processes that are independent over time. By means of a Markov chain analysis and matrix analytic methods, we develop a procedure to determine the distribution of lead times and inventories, that takes into account the correlation between orders and lead times. Our analysis shows that negative autocorrelation in demand, although more erratic, improves both lead time and inventory performance relative to IID demand. Positive correlation makes matters worse than IID demand. Due to the endogeneity of lead times, these effects are much more pronounced and substantial error may be incurred if this endogeneity is ignored.
dc.description.abstractAutocorrelated Demand
dc.description.abstractOperations/marketing Interface
dc.language.isoen
dc.subjectProduction-inventory Model
dc.titleCoordinating lead times and safety stocks under autocorrelated demand
dc.identifier.journalEuropean Journal of Operational Research
dc.source.volume232
dc.source.issue1
dc.source.beginpage52
dc.source.endpage63
dc.contributor.departmentLogistics Systems Dynamics Group, Cardiff Business School, United Kingdom
dc.contributor.departmentResearch Center for Operations Management, University KU Leuven, Belgium
dc.contributor.departmentDepartment of Mathematics and Computer Science, University of Antwerp, Belgium
vlerick.knowledgedomainOperations & Supply Chain Management
vlerick.typearticleVlerick strategic journal article
vlerick.vlerickdepartmentTOM
dc.identifier.vperid102358
dc.identifier.vperid140588
dc.identifier.vperid28093
dc.identifier.vperid141247
dc.identifier.vpubid5594


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