[1] Juan Zhiru, Wang Haiyan,. Demand change detection and inventory costs minimization [J]. Journal of Southeast University (English Edition), 2016, 32 (3): 385-390. [doi:10.3969/j.issn.1003-7985.2016.03.021]

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Demand change detection and inventory costs minimization()

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Journal of Southeast University (English Edition)[ISSN:1003-7985/CN:32-1325/N]

Volumn:

32

Issue:

2016 3

Page:

385-390

Research Field:

Economy and Management

Publishing date:

2016-09-20

Info

Title:

Demand change detection and inventory costs minimization

Author(s):

Juan Zhiru;  Wang Haiyan

School of Economics and Management, Southeast University, Nanjing 210096, China

Keywords:

demand detection;  demand change;  inventory cost minimization;  newsvendor

PACS:

F252

DOI:

10.3969/j.issn.1003-7985.2016.03.021

Abstract:

To minimize the inventory costs of detecting demand change, an acceptance/rejection method(threshold)is proposed. The proposed threshold can be identified by the newsvendor based on the excess cost, the shortage cost, the transitional probability of the demand change, and the magnitude of the demand change. Compared with the single exponential smoothing method, it is proved that the proposed method can save many more inventory costs when detecting a step change in demand. By analyzing the proposed method, it shows that as the magnitude of step change increases, the supply chain members turn to synchronously judge a step change, and as excess(shortage)cost increases, a newsvendor tends to respond slowly(early)to an increase in demand and responds early(slowly)to a decrease in demand. Observations from this study suggest that supply chain members should pay careful attention to different profit-margin products and different magnitude demand changes in cooperating and sharing demand information with others.

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Memo

Memo:

Biographies: Juan Zhiru(1986—), male, graduate; Wang Haiyan(corresponding author), male, doctor, professor, hywang@seu.edu.cn.
Foundation item: The National Natural Science Foundation of China(No.71171049, 71390335).
Citation: Juan Zhiru, Wang Haiyan. Demand change detection and inventory costs minimization[J].Journal of Southeast University(English Edition), 2016, 32(3):385-390.DOI:10.3969/j.issn.1003-7985.2016.03.021.

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