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- Title
Quantifying Inventory Reduction Using Postponement Strategy.
- Authors
Jishan Zhu
- Abstract
Consider a firm purchases the materials from overseas vendors and operates multiple warehouses. Using a simple postponement strategy, the firm makes the inventory purchasing decision at one point and delays the shipping (to each individual warehouse) decision to a later point. In this paper, we attempt to quantify the benefits of using this simple postponement strategy by giving two propositions to the following two inventory reduction related questions: 1) how much ordering quantity can be reduced by using postponement strategy? And 2) does the postponement strategy maintain the targeted service level (i.e., 95%) at each warehouses as well?.
- Subjects
DESTOCKING; BUSINESS enterprises; POSTPONEMENT (Supply chain management); DECISION making in business; BUSINESS planning
- Publication
Proceedings of the Northeast Business & Economics Association, 2012, p371
- ISSN
1936-203X
- Publication type
Article