Managing premium wines using an (s- 1 , s) inventory policy: a heuristic solution approach

Mauricio Varas, Franco Basso, Armin Lüer-Villagra, Alejandro Mac Cawley, Sergio Maturana

Resultado de la investigación: Article

Resumen

Operations research models are increasingly being used to support decision making in the wine industry. However, they have not yet been used to support inventory management decisions. In this paper, we develop a heuristic procedure for managing the stock of premium wines motivated by the operations of a small export-focused winery we worked with. Following an (s- 1 , s) inventory policy, we assume that the decision maker aims to minimize the steady-state expected values of work in process, overage, and underage costs. The developed heuristic is as follows. First, we approximate the dynamics of the labeling process by a group scheduling policy to obtain the mean delays for each labeled product. Then, we address the problem of setting the inventory positions for the whole product portfolio by solving one newsvendor-type problem for each end-product. We provide some theoretical insights, a numerical example, and we analyze the accuracy of our procedure.

Idioma originalEnglish
PublicaciónAnnals of Operations Research
DOI
EstadoPublished - 1 ene 2019

Huella dactilar

Premium
Inventory policy
Heuristics
Wine
Operations research
Wine industry
Product portfolio
Newsvendor
Costs
Labeling
Inventory management
Management decisions
Decision maker
Expected value
Decision making

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Management Science and Operations Research

Citar esto

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Managing premium wines using an (s- 1 , s) inventory policy : a heuristic solution approach. / Varas, Mauricio; Basso, Franco; Lüer-Villagra, Armin; Mac Cawley, Alejandro; Maturana, Sergio.

En: Annals of Operations Research, 01.01.2019.

Resultado de la investigación: Article

TY - JOUR

T1 - Managing premium wines using an (s- 1 , s) inventory policy

T2 - a heuristic solution approach

AU - Varas, Mauricio

AU - Basso, Franco

AU - Lüer-Villagra, Armin

AU - Mac Cawley, Alejandro

AU - Maturana, Sergio

PY - 2019/1/1

Y1 - 2019/1/1

N2 - Operations research models are increasingly being used to support decision making in the wine industry. However, they have not yet been used to support inventory management decisions. In this paper, we develop a heuristic procedure for managing the stock of premium wines motivated by the operations of a small export-focused winery we worked with. Following an (s- 1 , s) inventory policy, we assume that the decision maker aims to minimize the steady-state expected values of work in process, overage, and underage costs. The developed heuristic is as follows. First, we approximate the dynamics of the labeling process by a group scheduling policy to obtain the mean delays for each labeled product. Then, we address the problem of setting the inventory positions for the whole product portfolio by solving one newsvendor-type problem for each end-product. We provide some theoretical insights, a numerical example, and we analyze the accuracy of our procedure.

AB - Operations research models are increasingly being used to support decision making in the wine industry. However, they have not yet been used to support inventory management decisions. In this paper, we develop a heuristic procedure for managing the stock of premium wines motivated by the operations of a small export-focused winery we worked with. Following an (s- 1 , s) inventory policy, we assume that the decision maker aims to minimize the steady-state expected values of work in process, overage, and underage costs. The developed heuristic is as follows. First, we approximate the dynamics of the labeling process by a group scheduling policy to obtain the mean delays for each labeled product. Then, we address the problem of setting the inventory positions for the whole product portfolio by solving one newsvendor-type problem for each end-product. We provide some theoretical insights, a numerical example, and we analyze the accuracy of our procedure.

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KW - OR models

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