HEDGING AND FORECASTING IN INVENTORY MANAGEMENT.
Abstract
A multi-echelon production-distribution system is one in which the user and the producer of an item are linked together by one or more intermediate suppliers (for example, a chain of depots in a military system or a chain of distributors in an industrial system). An Industrial Dynamics simulation model exhibits a strong characteristic of such a system -- namely, small variations in the consumption rate at the user level can produce much larger variation in the order rate reaching the producer or factor level. This amplification is due to the ordering policies of the intermediate suppliers who convert the usage rate into a factory order rate. The ordering policy used in the simulation model for each intermediate level was reduced to a linear decision rule involving three parameters. Signal flow graph and transform techniques were then used to express the amplification effect in terms of these parameters for certain changes in the underlying usage rate at the bottom of the system. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 01, 1969
- Accession Number
- AD0684810
Entities
People
- James F. Burns
Organizations
- University of Florida