Abstract
This invited article reflects the particular preoccupations of the author, which concern the parallel and connected development of academic models for managing inventories and their actual applications in industry.Some centralised production-inventory models that have been of service to contemporary business practices in decentralised decision-making settings are discussed here. I have limited my examples to those in which I have had direct experience. I have attempted to highlight four key points. (a) The strategic role of inventories in capturing revenue and market share, in addition to their traditional role as buffers, in our contemporary customer-scarce Schumpeter’s market. (b) Facilitating the acceptance of model outputs by decision makers across organisational silos and even across firm boundaries using management mechanics. (c) Development and use of a general-purpose algorithm utilising infinitesimal perturbation analysis (IPA) derivatives. (d) The emergence of enterprise inventory optimisation (EIO) as mainstream software.
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