Inventory Management： Challenge， Solution Approaches and Applications
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1。 Introduction In daily life we contact with dozens of inventories， usually without thinking too hard about them。
For example， the cash， food， drink， etc。 For the corporations， they care how to supply the demandsso that they should have a good control of their inventory products to decrease the costs andincrease the profits。 Fortunately more and more researchers are researching on the theory and applications of inventory management （IM）。 They have achieved good results。 However the rangeof applications of the theory needs enlarging to boarder sense such as allocation of emptycontainers at the ports and routing problems， which we'll discuss in detail。
2。 Background Now we review the allocation of empty containers， which belongs to shipping industry。 Allcontainer lines complete freight rates， transit time and quality customer services。 Since a shippingline pays substantial operational expenses to maintain its container fleet， it is important that shippers plan and schedule efficiently the inventory of both company-owned containers andleased-containers。 Yield management in global containerization problems consists of allocation and routing problems。 In order to achieve the minimal total cost， allocation problems consider how to allocate empty containers to fulfill the shippers' demand， while routing problems focus on howto plan the vessel's route to distribute empty containers to terminal。 According to the Port Development Board， throughput at Hong Kong port will shoot up to 31 million TEUs （twenty-foot equivalent units） by 2005， to 36 million TEUs by 2011 and to 40 million TEUs by 2016 （SouthChina Morning Post， 27/6/1997）。 Shipping companies in Hong Kong have been competing globally to provide world-class container transportation services。 In order to increase a company'scompetitive edge， it is important to have better control of its expenditure and to be more responsive to shippers' demand。 Of course， the problem can be viewed as a transportation system，which is rather complex organizations which involve a great deal of human and material resources and which display intricate relationships and trade-offs among the various decisions and management policies affecting their different components。 Here we introduce inventory theory and achieve a simple policy about how to allocate empty containers at one port。 How to allocate all empty containers at each port is still unknown。 We want to modify our former result to fit in this case， or create new methods to solve this problem。 After figuring out the outline of allocatingall empty containers at each port， we'll touch how to transfer the empty containers from one portto the others。 Considering specific parameters such as insurance costs， handling costs， traffic costs，positions of the ports， we want to achieve good import and export methods for empty containers。
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