Stability analysis of constrained inventory systems with transportation delay

► The stability and periodicity of an inventory system with Forbidden Returns is studied. ► Complex and diversified set of behaviours and patterns exist in the asymptotically unstable region. ► Accurate lead-time information is essential to eliminate inventory drift and system instability. Stability...

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Veröffentlicht in:European journal of operational research Jg. 223; H. 1; S. 86 - 95
Hauptverfasser: Wang, Xun, Disney, Stephen M., Wang, Jing
Format: Journal Article
Sprache:Englisch
Veröffentlicht: Amsterdam Elsevier B.V 16.11.2012
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ISSN:0377-2217, 1872-6860
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Abstract ► The stability and periodicity of an inventory system with Forbidden Returns is studied. ► Complex and diversified set of behaviours and patterns exist in the asymptotically unstable region. ► Accurate lead-time information is essential to eliminate inventory drift and system instability. Stability is a fundamental design property of inventory systems. However, the often exploited linearity assumptions in the current literature create a major gap between theory and practice. In this paper the stability of a constrained production and inventory system with a Forbidden Returns constraint (that is, a non-negative order rate) is studied via a piecewise linear model, an eigenvalue analysis and a simulation investigation. The APVIOBPCS (Automatic Pipeline, Variable Inventory and Order Based Production Control System) and EPVIOBPCS (Estimated Pipeline, Variable Inventory and Order Based Production Control System) replenishment policies are adopted. Surprisingly, all kinds of non-linear dynamical behaviours of systems can be observed in these simple models. Exact expressions of the asymptotic stability boundaries and Lyapunovian stability boundaries are derived when actual and perceived transportation lead-time is 1 and 2 periods long respectively. Asymptotically stable regions in the non-linear Forbidden Return systems are identical to the stable regions in its unconstrained counterpart. However, regions of bounded fluctuations that continue forever, including both periodicity and chaos, exist in the parametrical plane outside the asymptotically stable region. Simulation shows a complex and delicate structure in these regions. The results suggest that accurate lead-time information is essential to eliminate inventory drift and instability and that ordering policies have to be designed properly in accordance with the actual lead-time to avoid these fluctuations and divergence.
AbstractList Stability is a fundamental design property of inventory systems. However, the often exploited linearity assumptions in the current literature create a major gap between theory and practice. In this paper the stability of a constrained production and inventory system with a Forbidden Returns constraint (that is, a non-negative order rate) is studied via a piecewise linear model, an eigenvalue analysis and a simulation investigation. The APVIOBPCS (Automatic Pipeline, Variable Inventory and Order Based Production Control System) and EPVIOBPCS (Estimated Pipeline, Variable Inventory and Order Based Production Control System) replenishment policies are adopted. Surprisingly, all kinds of non-linear dynamical behaviours of systems can be observed in these simple models. Exact expressions of the asymptotic stability boundaries and Lyapunovian stability boundaries are derived when actual and perceived transportation lead-time is 1 and 2 periods long respectively. Asymptotically stable regions in the non-linear Forbidden Return systems are identical to the stable regions in its unconstrained counterpart. However, regions of bounded fluctuations that continue forever, including both periodicity and chaos, exist in the parametrical plane outside the asymptotically stable region. Simulation shows a complex and delicate structure in these regions. The results suggest that accurate lead-time information is essential to eliminate inventory drift and instability and that ordering policies have to be designed properly in accordance with the actual lead-time to avoid these fluctuations and divergence.
► The stability and periodicity of an inventory system with Forbidden Returns is studied. ► Complex and diversified set of behaviours and patterns exist in the asymptotically unstable region. ► Accurate lead-time information is essential to eliminate inventory drift and system instability. Stability is a fundamental design property of inventory systems. However, the often exploited linearity assumptions in the current literature create a major gap between theory and practice. In this paper the stability of a constrained production and inventory system with a Forbidden Returns constraint (that is, a non-negative order rate) is studied via a piecewise linear model, an eigenvalue analysis and a simulation investigation. The APVIOBPCS (Automatic Pipeline, Variable Inventory and Order Based Production Control System) and EPVIOBPCS (Estimated Pipeline, Variable Inventory and Order Based Production Control System) replenishment policies are adopted. Surprisingly, all kinds of non-linear dynamical behaviours of systems can be observed in these simple models. Exact expressions of the asymptotic stability boundaries and Lyapunovian stability boundaries are derived when actual and perceived transportation lead-time is 1 and 2 periods long respectively. Asymptotically stable regions in the non-linear Forbidden Return systems are identical to the stable regions in its unconstrained counterpart. However, regions of bounded fluctuations that continue forever, including both periodicity and chaos, exist in the parametrical plane outside the asymptotically stable region. Simulation shows a complex and delicate structure in these regions. The results suggest that accurate lead-time information is essential to eliminate inventory drift and instability and that ordering policies have to be designed properly in accordance with the actual lead-time to avoid these fluctuations and divergence.
Stability is a fundamental design property of inventory systems. However, the often exploited linearity assumptions in the current literature create a major gap between theory and practice. In this paper the stability of a constrained production and inventory system with a Forbidden Returns constraint (that is, a non-negative order rate) is studied via a piecewise linear model, an eigenvalue analysis and a simulation investigation. The APVIOBPCS (Automatic Pipeline, Variable Inventory and Order Based Production Control System) and EPVIOBPCS (Estimated Pipeline, Variable Inventory and Order Based Production Control System) replenishment policies are adopted. Surprisingly, all kinds of non-linear dynamical behaviours of systems can be observed in these simple models. Exact expressions of the asymptotic stability boundaries and Lyapunovian stability boundaries are derived when actual and perceived transportation lead-time is 1 and 2 periods long respectively. Asymptotically stable regions in the non-linear Forbidden Return systems are identical to the stable regions in its unconstrained counterpart. However, regions of bounded fluctuations that continue forever, including both periodicity and chaos, exist in the parametrical plane outside the asymptotically stable region. Simulation shows a complex and delicate structure in these regions. The results suggest that accurate lead-time information is essential to eliminate inventory drift and instability and that ordering policies have to be designed properly in accordance with the actual lead-time to avoid these fluctuations and divergence. [PUBLICATION ABSTRACT]
Author Disney, Stephen M.
Wang, Jing
Wang, Xun
Author_xml – sequence: 1
  givenname: Xun
  surname: Wang
  fullname: Wang, Xun
  email: paul.wong.buaa@gmail.com
  organization: School of Economics and Management, BeiHang University, Beijing 100191, China
– sequence: 2
  givenname: Stephen M.
  surname: Disney
  fullname: Disney, Stephen M.
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  givenname: Jing
  surname: Wang
  fullname: Wang, Jing
  email: pekwjing@public.bta.net.cn
  organization: School of Economics and Management, BeiHang University, Beijing 100191, China
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Issue 1
Keywords System dynamics
Complexity theory
Inventory
Logistics
Chaos
Divergence
Refeeding
Transportation system
Optimal policy
Dynamical system
Modeling
Linear model
Asymptotic stability
Replenishment
Setup time
Inventory control
Eigenvalue problem
Production system
Travel time
Periodicity
Delay system
Non linear system
Computational complexity
Production management
Economic order quantity
Piecewise linearization
Piecewise-linear techniques
Language English
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Snippet ► The stability and periodicity of an inventory system with Forbidden Returns is studied. ► Complex and diversified set of behaviours and patterns exist in the...
Stability is a fundamental design property of inventory systems. However, the often exploited linearity assumptions in the current literature create a major...
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StartPage 86
SubjectTerms Applied sciences
Asymptotic properties
Boundaries
Complexity theory
Dynamical systems
Exact sciences and technology
Inventories
Inventory
Inventory control, production control. Distribution
Inventory management
Logistics
Nonlinear dynamics
Operational research and scientific management
Operational research. Management science
Operations research
Policies
Production controls
Stability
Stockpiling
Studies
System dynamics
Systems stability
Transportation
Title Stability analysis of constrained inventory systems with transportation delay
URI https://dx.doi.org/10.1016/j.ejor.2012.06.014
http://www.econis.eu/PPNSET?PPN=72531804X
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