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International Journal of Production Economics
Article . 2007 . Peer-reviewed
License: Elsevier TDM
Data sources: Crossref
image/svg+xml Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao Closed Access logo, derived from PLoS Open Access logo. This version with transparent background. http://commons.wikimedia.org/wiki/File:Closed_Access_logo_transparent.svg Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao
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Global sensitivity analysis in inventory management

Authors: BORGONOVO, EMANUELE; PECCATI, LORENZO;

Global sensitivity analysis in inventory management

Abstract

Abstract This paper deals with the sensitivity analysis (SA) of inventory management models when uncertainty in the input parameters is given full consideration. We make use of Sobol’ function and variance decomposition method for determining the most influential parameters on the model output. We first illustrate the method by means of an analytical example. We provide the expression of the global importance of demand, holding costs, order costs of the Harris economic order quantity (EOQ) formula. We then present the global SA of the inventory management model developed by Luciano and Peccati [1999. Capital structure and inventory management: the temporary sale problem. International Journal of Production Economics 59, 169–178] for the economic order quantity estimation in the context of the temporary sale problem. We show that by performing global SA in parallel to the modeling process an analyst derives insights not only on the EOQ structure when its expression is not analytically known, but also on the relevance of modeling choices, as the inclusion of financing policies and special orders.

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Keywords

Inventory management; Parameter uncertainty; Global sensitivity analysis; EOQ; Uncertainty

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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
30
Top 10%
Top 10%
Top 10%
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