Robust Sliding-Mode Supply Policy for Periodic-Review Inventory Systems with Time-Varying Lead-Time Delay

Abstract

Abstract In this paper, the problem of inventory management in production-inventory systems is addressed from a control-theoretic perspective. We analyze the systems where retailers (or customers) are served from a common distribution point. The stock at the distribution center used to satisfy the unknown, time-varying retailers’ demand is replenished either by a single, or multiple suppliers according to the company sourcing strategy. The stock replenishment orders are issued at regular intervals and are realized with delay which differs among the supply options and may change in time. A new, nonlinear inventory policy based on the principles of sliding-mode control is proposed. The policy guarantees that the demand is always entirely satisfied from the on-hand stock (yielding zero lost-sales cost) and the warehouse capacity is not exceeded (what eliminates the risk of high-cost emergency storage). It is also shown to be robust with respect to the unknown, time-varying demand and fluctuations in the orders procurement delay.