Stock rationing has recently been receiving a lot of attention from researchers and practitioners in the area of supply chain management. In this talk I would like to discuss two stock rationing issues when the supplier’s production is capacitated: order batching and information sharing. The first topic explores the impact of customer order sizes in a make-to-stock system with multiple demand classes. We first characterize the manufacturer's optimal production and rationing policies when the demand is non-unitary and lost if unsatisfied. We also investigate the optimal policies of a backorder system with two demand classes and fixed order sizes. Through a numerical study we show the effects of order batching on the manufacturer's inventory cost as well as on the benefit of optimal stock rationing. The second topic considers a two-echelon supply chain with one manufacturer and two non-identical retailers. The downstream retailers share their instantaneous inventory/sales information with the upstream manufacturer. We characterize the optimal inventory policies and explore the benefits of optimal stock rationing over the First Come First Served (FCFS) and the Modified Echelon-Stock Rationing (MESR) policies.

Dr. Boray Huang is currently an assistant professor of MIS/POM in School of Business Administration, University of Mississippi. He received his Ph.D. degree from Northwestern University (U.S.A) and M.S. degree from National Tsing-Hua University (Taiwan.) His major research interests are in supply chain management, stochastic optimization and marketing-production coordination. He has published several peer-reviewed articles in Operations Research, Operations Research Letters and Journal of Chinese Institute of Industrial Engineers. He has also served as ad-hoc reviewers for Management Science, Manufacturing & Service Operations Management, Naval Research Logistics and IIE Transactions.