Cornell University

ORIE Colloquium: Nagesh Gavirneni (Cornell University) - Optimal Periodic Flexible Policies for Two-stage Serial Supply Chains: A Technical Note

Tuesday, September 3, 2013 at 4:15pm

Frank H. T. Rhodes Hall, 253

In a two-stage serial supply chain, Periodic Flexible (PF) policies can reduce the inefficiency due to decentralization by as much as 43%. Existing literature has mostly defined and implemented ad-hoc periodic flexible policies and has not attempted to identify the optimal periodic flexible policies. In this paper, we demonstrate a general way to find the optimal PF policies through an example of periodic flexible policies of length two. In particular, we show that under the optimal policy, the retailer follows a state dependent capacitated policy or a state dependent order upto policy. Furthermore, we can approximate the optimal restricted ordering function by a piecewise linear function. Numerical examples illustrate that the optimal PF(2) policies are able to reduce the total supply chain cost by as much as 13%. The linear approximation is effective with an average error of less than 1%.

Event Type



College of Engineering, Operations Research and Information Engineering


engineering, operations research, orie



Nagesh Gavirneni

Speaker Affiliation

Samuel Curtis Johnson Graduate School of Management, Cornell University

Google Calendar iCal Outlook

Recent Activity