Industrial Engineer - September 2007; Volume 39: Number 9
According to the U.S. Census Bureau, current inventories at manufacturers totaled $513.5 billion in April 2007. If an improvement of even 1 percent could be achieved, the impact would be staggering. The authors were motivated by the automotive industry, in particular, which currently has tens of billions of dollars worth of inventory in the United States even while many customers are waiting for orders to be filled. In "Optimal Production and Inventory Policies of Priority and Price-Differentiated Customers," Serhan Duran and Julie Swann of the Georgia Institute of Technology, Tieming Liu of Oklahoma State University, and David Simchi-Levi of Massachusetts Institute of Technology study such a demand management problem.