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[2017-06-08]Building Supply Chain Resilience through Virtual Stockpile Pooling



Building Supply Chain Resilience through Virtual Stockpile



报告人:Professor Jeannette Song (宋京生)

Fuqua School of Business, Duke UniversityPhD (Columbia University)


主持人: 宋洁





Stockpiling inventory is an essential strategy for building supply chain resilience. It enables firms to continue operating while finding a solution to an unexpected event that causes a supply disruption or demand surge. While extremely valuable when actually deployed, stockpiles incur large holding costs and usually provide no benefits until such a time. To help to reduce this cost, this paper presents a new approach for managing stockpiles. We show that if leveraged intelligently, stockpiles can also help an organization better meet its own regular demand by enabling a type of virtual pooling we call virtual stockpile pooling (VSP). The idea of VSP is to first integrate the stockpile into several locations' regular inventory buffers and then dynamically reallocate the stockpile among these locations in reaction to the demand realizations to achieve a kind of virtual transshipment. To study how to execute VSP and determine when it can provide the most value, we formulate a stylized multi-location stochastic inventory model and solve for the optimal stockpile allocation and inventory order policies. We show that VSP can provide significant cost savings: in some cases nearly the full holding cost of the stockpile (i.e., VSP effectively maintains the stockpile for free), in other cases nearly the savings of traditional physical inventory pooling. Last, our results prescribe implementing VSP with many locations for large stockpiles, but only a few locations for small stockpiles. (Joint work with Fang Liu and Jordan Tong.)



Professor Song’s expertise is in operations and supply chain management. She studies topics like supply chain coordination mechanisms, global sourcing strategies, socially responsible and sustainable supply chain development, inventory and logistics system design and planning, assemble-to-order systems. She has published numerous articles in leading international academic journals such as Management Science, Manufacturing & Service Operations Management (M&SOM), and Operations Research. Professor Song is the recipient of several research grants from the U.S. National Science Foundation and the Natural Science Foundation of China. In 2003, she was awarded Distinguished Overseas Young Scholar by the Natural Science Foundation of China. In 2009, she was named the Chang Jiang Scholar by the Ministry of Education in China. In 2015, she received Thousand Talents Award from the Organization Department of the CCCPC in China. Professor Song has served on the editorial boards of several leading academic journals, including Area Editor for Operations Research and Department Editor for IIE Transactions, as well as Associate Editor for Management Science, Operations Research, M&SOM, and Naval Research Logistics. She is also a past President of the Manufacturing and Service Operations Management (MSOM) Society of INFORMS. In 2014, she received the MSOM Distinguished Service Award for her many contributions over the years to the society.