Influence of product return lead-time on inventory control

Mohamed Hichem Zerhouni (1) , Jean-Philippe Gayon (1) , Yannick Frein (1)

1 G-SCOP_GCSP - Gestion et Conduite des Systèmes de Production

We consider a production-inventory system with capacity constraint and item returns correlated to demand. The system is modelled by an M/M/1 make-to-stock queue with lost sales. A satisfied demand incurs an item return with a certain probability, after an exponentially distributed return lead-time. We distinguish two cases: When the number of items to be returned is observable and when it is not observable. For the first case, we partially characterize the optimal policy. For the second case, we consider a simple base-stock policy as a heuristic. Finally, we carry out a numerical study in order to investigate the impact of return lead-time on these policies. In particular, we exhibit interesting limit behavior, when the return lead-time is either small or large.

Domaines: Autre

Mohamed Hichem Zerhouni, Jean-Philippe Gayon, Yannick Frein. Influence of product return lead-time on inventory control. International Conference on Industrial Engineering and Systems Management (IESM), May 2009, Montreal, Canada. ⟨hal-00414213⟩