In this talk, we develop two inventory distribution management models to understand how free storage times provided by terminals affect a firm's inventory and distribution network design decisions. In particular, we first adopt the classical echelon inventory modelling approach to synthesize the effects of free storage times in a one warehouse multi-retailer system. The model is constructed by adopting the integer-ratio policy. We analyze the structural properties of the continuous relaxation of the integer-ratio policy model. These facilitate the development of an $O(N/log N)$ algorithm to solve the relaxed model, where $N$ stands for the number of terminals. Based on these results, we further propose a distribution network design model that integrates facility location, transportation, and infinite horizon multi-echelon inventory cost functions. Based on these two models, we derive several interesting insights on the pertinent issues in inventory management and distribution network design theoretically and computationally. For instance, we show that the optimal solution to the continuous relaxation model can well synchronize the two-echelon inventory replenishment activities asymptotically. Moreover, we also implement the two models to study how the free storage times consideration affects supply chain replenishment decisions as well as its impact on supply chain configurations.
Shu Jia is a Professor at the Department of Management Science and Engineering, School of Economics and Management, Southeast University, Nanjing, China. He received a B.Eng. degree in Power Automation Engineering from Southeast University, and a Ph.D. in Operations Research from the Singapore-MIT Alliance Program. His research interests include Logistics and Transportation Management, Computational IP, etc. He is abundant in researches published in the international mainstream journals such as Operations Research,Transportation Science, Naval Research Logistics, etc.