Design of a novel adaptive inventory control system based on the online identification of lead time

In this paper, an adaptation method for the online identification of lead time is incorporated in production-inventory control systems. Based on the lead time estimate, the tuning parameters are updated in real time to improve the efficiency of the system. Combination of the adaptive scheme with a proportional control law is able to eliminate the inventory drift that appears when the actual lead time is not known in advance or when it varies with time. A detailed analysis is provided for the proposed production-inventory system, including a stability analysis and the quantification of its bullwhip effect. Several examples and comparison with state-of-the-art alternative approaches illustrate the efficiency of the system.