Seminar Series: JianJu Xu

Jianjun Xu
Postdoctoral researcher at the Zaragoza Logistics Center

"Optimizing Dynamic Inventory Replenishment and Substitution for Two Products with Positive Leadtimes"

We carry out a structural analysis for a family of two products to be manufactured and supplied to a market with demand uncertainty. To capture the reality, we assume that manufacturing times are not negligible and not the same for the products. A high-end product (product 1) can substitute for the low-end product (product 2) as product 1 possesses the entire features of product 2. We discover the structural properties of efficient optimal policies for dynamic replenishment and substitution of inventory management. The optimal decisions can be controlled by three two-dimension switching curves given current inventories and outstanding orders available.