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Jeppesen Uses a Dynamic-Programming-Based DSS to Manage Inventory

Bill Tarantino Decision Support, Inventory Management

We developed a system for managing inventory at Jeppesen Sanderson, Inc., a major provider of aviation-information products. The system determines order quantities for charts used in flight manuals. These charts contain essential safety information that changes frequently, making standard methods for inventory management ineffective. We formulated the problem as a dynamic programming model and developed a simple heuristic-solution procedure for determining order quantities. Based on this procedure, we also developed a decision support system (DSS) and implemented it for 600 of the most expensive Jeppesen charts. The system has been in use since August 1998, generating actualannualcost reductions of over $800,000.

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