Multi-Stage Production Planning and Inventory Control
This paper treats a two-echelon inventory system. The higher echelon is a single location reffered to as the depot, which places orders for supply of a single com modity. The lower echelon consists of several points, called the retailers, which are suppl
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266 Multi-Stage Production Planning and Inventory Control
Edited by S. Axsater, Ch. Schneeweiss and E. Silver
Spri nger-Verlag Berlin Heidelberg New York Tokyo
Editorial Board H. Albach M. Beckmann (Managing Editor) P. Dhrymes G. Fandel J. Green W. Hildenbrand W. Krelle (Managing Editor) H.P. KOnzi G.L. Nemhauser K. Ritter R. Sato U. Schittko P. Schonfeld R. Selten Managing Editors Prof. Dr. M. Beckmann Brown University Providence, RI 02912, USA Prof. Dr. W. Krelle Institut fOr Gesellschafts- und Wirtschaftswissenschaften der Universitat Bonn Adenauerallee 24-42, 0-5300 Bonn, FRG Editors Prof. Dr. Sven Axsater University of Technology Division of Transportation and Material Flow Systems Prospekteringsv 11 Porson, A-95187 Lulea, Sweden Prof. Dr. Christoph Schneeweiss Universitat Mannheim, Lehrstuhl fUr Allgemeine Betriebswirtschaftslehre und Unternehmensforschung SchloB, D-6800 Mannheim, FRG Prof. Dr. Edward Silver University of Calgary, Faculty of Management 2500 University Drive, N. w., Calgary, Alberta, T2N 1N4, Canada
ISBN 978-3-540-16436-4 ISBN 978-3-642-51693-1 (eBook) DOI 10.1007/978-3-642-51693-1 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically those of translation, reprinting, re-use of illustrations, broadcasting, reproduction by photocopying machine or similar means, and storage in data banks. Under § 54 of the German Copyright Law where copies are made for other than private use, a fee is payable to "Verwertungsgesellschaft Wort", Munich.
© by Springer-Verlag Berlin Heidelberg 1986
PRE F ACE
Multi-stage production planning and inventory control is one of the most challenging problem areas in the field of management. Quite generally, in any realistic multi-stage and stochastic situation it is concerned with how to lower the total of holding, set-up and shortage costs. In particular three problems have to be solved. The first deals with stochastics, or more specifically with the sizing and location of safety stocks within a multi-stage (production or distribution) system. The second problem is concerned with multi-stage lot-sizing within an MRP-system and the third deals with coordination of decisions at different hierarchical planning levels. All three problems are interrelated and it is only recently that considerable progress has been made in each of the three areas. Hence it was only natural to discuss the state of the art of these rapidly growing problem areas in production and inventory control and to organize a workshop which in October 1985 was held at the University of Mannheim, Germany. During two days about 40 specialists from 14 nations discussed 11 papers which were presented by research workers from many of the most active centers of production planning and inventory control allover the world. From the North American Continent, for instance, production groups from Cornell University (J. Muckstadt), MIT (S. Graves), and the Uni versi ty of Calgary (E. Silver) were represented whereas from Europe the groups
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