Browsing by Author "Chiang, Chi"

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A Note on Capacitated Periodic Review Production Models
(2010)
Chiang, Chi
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管理科學系
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Department of Management Science
Although the production/inventory literature has investigated the capacitated periodic production systems, and showed that the optimal policy is of the modified order-up-to type, the issue of computing the optimal order-up-to level remained unanswered. In this paper, we show that the optimal order-up-to level can be computed by using a convergence theorem. In addition, we compare it to the ordinary order-up-to level for periodic production systems with unlimited capacity. We believe that the proposed method can be immediately applied in practice.
A note on periodic review inventory models with stochastic supplier's visit intervals and fixed ordering cost
(2013-12-01)
Chiang, Chi
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管理科學系
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Department of Management Science
Most periodic review models in the inventory literature have assumed a fixed length of the review periods. In this note, we extend the work of Chiang (2008), and consider backlogged and lost-sales periodic review models where the review periods are of a variable length and there is a fixed cost of ordering for replenishment. Assuming that period lengths are independently and identically distributed, we show (using an exact method of computing inventory holding costs) that an (s, S) policy is optimal for the infinite horizon problem. The periodic review policies developed are thus easy to implement. The computation shows that if the fixed cost of ordering is small, one needs to use the proposed periodic policies. (C) 2013 Elsevier B.V. All rights reserved.
A periodic review replenishment model with a refined delivery scenario
(2009-03-01)
Chiang, Chi
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管理科學系
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Department of Management Science
This paper considers a single-item replenishment problem where every n periods the buyer plans for the quantity delivered for each upcoming period. Assuming that demand not filled immediately is backlogged, we suggest that the quantity delivered in the immediately upcoming period be of any size and the quantity delivered in each of the subsequent (n-1) periods be equal to or smaller than a fixed quantity Q. We derive the average cost per n periods and compute the optimal order-up-to level for the proposed replenishment policy. Next, assuming a fixed cost for reviewing inventory and planning deliveries, we obtain the optimal n by minimizing the expected cost per period. Finally, the optimal Q can also be determined. The proposed periodic review policy is easy to implement. (C) 2008 Elsevier B.V. All rights reserved.
A Simple Heuristic for the Lost-Sales Periodic Review Inventory Systems
(2011)
Chiang, Chi
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管理科學系
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Department of Management Science
Periodic review inventory systems are widely used in practice, especially when many items are purchased from the supplier. In this case, the supply lead time is usually shorter than the period length. In this research, we propose a simple heuristic for such periodic review systems with lost sales.
An inventory model with order expediting and splitting
(2006)
Chiang, Chi
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管理科學系
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Department of Management Science
Expedited shipments are often seen in practice. When the inventory level of an item gets dangerously low after an order has been placed, material managers are often willing to expedite the order at extra costs. In this paper, we propose a single-item continuous review inventory policy with order expediting. Besides the two usual operational parameters: reorder point s and order quantity Q, it consists of a third parameter called the expediting level R. If inventory falls below R at the end of the manufacturing lead-time, the buyer can request the supplier to deliver part of an outstanding order via a fast transportation mode. A simple procedure is developed to obtain the optimal solution. Computational results show that the proposed policy is worthwhile to use if service level is high or the fixed cost of expediting is negligible.
An order expediting policy for continuous review systems with manufacturing lead-time
(2010-06-01)
Chiang, Chi
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管理科學系
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Department of Management Science
Expedited shipments are often seen in practice. When the inventory level of an item gets dangerously low after an order has been placed, material managers are often willing to expedite the order at extra fixed and/or variable costs. This paper proposes a single-item continuous-review order expediting inventory policy, which can be considered as an extension of ordinary (s,Q) models. Besides the two usual operational parameters: reorder point s and order quantity Q it consists of a third parameter called the expedite-up-to level R. If inventory falls below R at the end of the manufacturing lead-time, the buyer can request the upstream supplier to deliver part of an outstanding order via a fast transportation mode. The amount expedited will raise inventory to R, while the remaining order is delivered via a slow (regular) supply mode. Simple procedures are developed to obtain optimal operational parameters. Computational results show that the proposed policy can save large costs for a firm if service level is high, demand variability is large, the extra cost for expediting is small, or the manufacturing lead-time is long. (C) 2009 Elsevier B.V. All rights reserved.
An Order Fulfillment Model With Periodic Review Mechanism in Semiconductor Foundry Plants
(2014-11-01)
Chiang, Chi
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Hsu, Hui-Lan
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管理科學系
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Department of Management Science
In today\'s globalization competition, manufacturing firms are using an order fulfillment system to give available-to-promise (ATP) capacity efficiently. An ordinary order fulfillment system will plan capacity based on forecasts and assign ATP quotas to incoming orders. Its basic idea is to enhance capacity utilization and avoid poor customer service. However, in the semiconductor industry, demand is highly volatile, and a make-to-order (MTO) manufacturer often runs the risk of cancelled committed demands. In this research, we propose an integrated order fulfillment model for a MTO semiconductor foundry fab to maximize corporate profit. Specifically, we suggest a periodic allocation review mechanism to reallocate unused ATP quotas. We examine the model performance based on different data sets. Results showed that capacity utilization and profitability are improved substantially with the periodic review mechanism, especially when demand forecast is not reliable.
Optimal control policy for a standing order inventory system
(2007-10-16)
Chiang, Chi
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管理科學系
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Department of Management Science
In this paper, we consider a standing order inventory system in which an order of fixed size arrives in each period. Since demand is stochastic, such a system must allow for procurement of extra units in the case of an emergency and sell-offs of excess inventory. Assuming the average-cost criterion, Rosenshine and Obee (Operations Research 24 (1976) 1143-1155) first studied such a system and devised a 4-parameter inventory control policy that is not generally optimal. The current paper uses dynamic programming to determine the optimal control policy for a standing order system, which consists of only two operational parameters: the dispose-down-to level and order-up-to level. Either the average-cost or discounted-cost criterion can be assumed in the proposed model. Also, both the backlogged and lost-sales problems are investigated in this paper. By using a convergence theorem, we stop the dynamic programming computation and obtain the two optimal parameters. (C) 2006 Elsevier B.V. All rights reserved.
Optimal ordering policies for periodic-review systems with a refined intra-cycle time scale
(2007-03-01)
Chiang, Chi
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管理科學系
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Department of Management Science
Chiang [C. Chiang, Optimal ordering policies for periodic-review systems with replenishment cycles, European Journal of Operational Research 170 (2006) 44-56] recently proposed a dynamic programming model for periodic-review systems in which a replenishment cycle consists of a number of small periods (each of identical but arbitrary length) and holding and shortage costs are charged based on the ending inventory of small periods. The current paper presents an alternative (and concise) dynamic programming model. Moreover, we allow the possibility of a positive fixed cost of ordering. The optimal policy is of the familiar (s, S) type because of the convexity of the one-cycle cost function. As in the periodic-review inventory literature, we extend this result to the lost-sales periodic problem with zero lead-time. Computation shows that the long-run average cost is rather insensitive to the choice of the period length. In addition, we show how the proposed model is modified to handle the backorder problem where shortage is charged on a per-unit basis irrespective of its duration. Finally, we also investigate the lost-sales problem with positive lead-time, and provide some computational results. (c) 2006 Elsevier B.V. All rights reserved.
Optimal promotional time for maximum sales response with an initial market share in internet marketing
(2011-06-18)
Lin, Chiun-Sin
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Chiang, Chi
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Chin, Shun-Peng
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管理科學系
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Department of Management Science
Most products usually have an initial market share at the beginning in marketing. In order to increase and maximize sales response, sellers can set an optimal promotional time limit. This paper aims to explain how an existing initial market share with vital parameters affects the range and shape of sales response curve to reach optimal promotional time. We use two opposite negative exponential growth functions to build a mathematical model, apply decision calculus to determine parameters, and optimize promotional time limits for maximum sales response. We demonstrate real numerical examples of e-mail marketing by using functions with or without an initial response. Furthermore, we also conduct sensitivity analyses to compare different optimal time limits by various response rates. This paper contributes to the field by providing a sales response model with an initial market share and can be applied to the general one force or two forces cases with vital capacity parameter and exponential growth coefficient to get more elastic, adequate, and complete results.
Optimizing time limits for maximum sales response in Internet shopping promotions
(2011-01-01)
Chiang, Chi
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Lin, Chiun-Sin
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Chin, Shun-Peng
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管理科學系
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Department of Management Science
Sellers usually set a promotional time limit to ensure that products can be sold as soon as possible in Internet markets. This research attempts to build a decision support system that optimizes the time limit for maximum sales response or profit in Internet shopping promotions. We decompose the effect of time limits into two opposing forces, which are the awareness and urgency of a promotional offer that are depicted as hyperbolic S-shaped functions. Using the decision calculus approach, we can determine the optimal promotional time limit with different input parameters. We illustrate the use of the proposed system with real world examples and conduct some sensitivity analyses. We compare our numerical results from hyperbolic functions with those from simple exponential functions; we find that hyperbolic functions yield more appropriate promotional time limits on Internet. This research contributes to the field of decision support by providing a new approach to determining the optimal time limit for online sales promotions. (C) 2010 Elsevier Ltd. All rights reserved.
Periodic review inventory models with stochastic supplier's visit intervals
(2008-10-01)
Chiang, Chi
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管理科學系
;
Department of Management Science
Periodic review inventory models are widely used in practice, especially for inventory systems in which many different items are purchased from the same supplier. However, all periodic review models have assumed a fixed length of the review periods. In practice, it is possible that the review periods are of a variable length. Such periodic systems result mainly from supply uncertainties. For example, the supplier visits the downstream retailers and replenishes inventories for them, but does not always come in constant intervals. This may be because retailers are geographically dispersed in the supply chain, the supplier is in a relatively more powerful position, or the supplier simply does not have a reliable visit schedule. In such situations, the replenishment cycle length is random in nature. In this paper, we use dynamic programming to model such institutional contexts. We assume that the supplier's visit intervals are independently and identically distributed. With a suitable transformation. the back-logged periodic review model derived becomes a standard discrete-time model. The computation shows that ignoring the variability of the supplier's visit intervals can incur extremely large losses, especially if shortage is costly, demand variability is low, and/or the replenishment lead-time is short. (c) 2008 Elsevier B.V. All rights reserved.
Periodic Review Inventory Models with Variable Periods
(2009)
Chiang, Chi
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管理科學系
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Department of Management Science
All periodic review models in the inventory literature have assumed a fixed length of the review periods. In this paper, we extend the work of Chiang [International Journal of Production Economics, 115 (2008) 433-438], and consider periodic review models where the review periods are of a variable length and there is a fixed cost or ordering. Assuming that period lengths are independently and identically distributed, we show that an order-up-to or (s, S) policy is optimal for the infinite horizon problem. The periodic review policies developed are thus easy to implement. The computation shows that ignoring the period length variability can incur unnecessary large costs, especially if the fixed cost of ordering is negligible and/or shortage is costly.