A multiechelon inventory model with fixed replenishment intervals
Article Abstract:
A new model is presented that can be used to examine a wide array of inventory policies for a multiechelon system in the case of Poisson demand, deterministic lead times and a distribution network topology. Virtual allocation, a new approach for allocating stock in limited supply, is also introduced. The model is applied on a set of test problem for a two-echelon system, with the central warehouse being the upper echelon and the retail sites as the lower echelon, to examine how effective inventory policies are structured. The results of the computational studies for the system provide interesting insights into the role of the central warehouse in multiechelon systems. Findings indicate that most of the safety stock should be held at the retail sites rather than the central warehouse.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1996
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Evaluation of one-for-one replenishment policies for multiechelon inventory systems
Article Abstract:
Techniques for calculating and approximating the steady-state behavior of multi-echelon inventory systems with one-for-one replenishment policies are presented. The assumptions include that each arc in the network depicts a transit system, there is sequential processing of units in each transit system, transit systems are exogenous, and the transit systems for the arcs are mutually independent. The average inventory and the average back orders outstanding can be calculated or estimated at every location in the system for any base-stock level. The results of the calculations indicate that variances in transit time play an important part in system performance.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1991
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Inventory service-level measures: convexity and approximation
Article Abstract:
A typical inventory control technique involves the use of the reorder-point-order-quantity system. With this technique, an order of consistent size q is made when the inventory position declines to a fixed reorder point r. Inventory control theory has always been based on the performance model of these r and q policies through the use of formulas that measure stockouts, average inventory, and other criteria that perform as functions of r and q.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1986
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