Stock Rationing in a Continuous Review Two-Echelon Inventory Model
(2004) In Annals of Operations Research 126(1-4). p.177-194- Abstract
- In this paper we consider a 1-warehouse, N-retailer inventory system where demand occurs at all locations. We introduce an inventory model which allows us to set different service levels for retailers and direct customer demand at the warehouse. For each retailer a critical level is defined, such that a retailer replenishment order is delivered from warehouse stock if and only if the stock level exceeds this critical level. It is assumed that retailer replenishment orders, which are not satisfied from warehouse stock, are delivered directly from the outside supplier, instead of being backlogged. We present an analytical upper bound on the total cost of the system, and develop a heuristic method to optimize the policy parameters. Numerical... (More)
- In this paper we consider a 1-warehouse, N-retailer inventory system where demand occurs at all locations. We introduce an inventory model which allows us to set different service levels for retailers and direct customer demand at the warehouse. For each retailer a critical level is defined, such that a retailer replenishment order is delivered from warehouse stock if and only if the stock level exceeds this critical level. It is assumed that retailer replenishment orders, which are not satisfied from warehouse stock, are delivered directly from the outside supplier, instead of being backlogged. We present an analytical upper bound on the total cost of the system, and develop a heuristic method to optimize the policy parameters. Numerical experiments indicate that our technique provides a very close approximation of the exact cost. Also, we show that differentiating among the retailers and direct customer demand can yield significant cost reductions. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/1274235
- author
- Axsäter, Sven LU ; Kleijn, M and De Kok, TG
- organization
- publishing date
- 2004
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- allocation policy, multi-echelon, stochastic
- in
- Annals of Operations Research
- volume
- 126
- issue
- 1-4
- pages
- 177 - 194
- publisher
- Springer
- external identifiers
-
- wos:000188211900008
- scopus:4043158629
- ISSN
- 1572-9338
- DOI
- 10.1023/B:ANOR.0000012280.68155.a3
- language
- English
- LU publication?
- yes
- id
- ee1a32bb-9f7e-4d0a-9292-ed8ed87b9258 (old id 1274235)
- date added to LUP
- 2016-04-01 16:45:48
- date last changed
- 2023-01-05 02:07:36
@article{ee1a32bb-9f7e-4d0a-9292-ed8ed87b9258,
abstract = {{In this paper we consider a 1-warehouse, N-retailer inventory system where demand occurs at all locations. We introduce an inventory model which allows us to set different service levels for retailers and direct customer demand at the warehouse. For each retailer a critical level is defined, such that a retailer replenishment order is delivered from warehouse stock if and only if the stock level exceeds this critical level. It is assumed that retailer replenishment orders, which are not satisfied from warehouse stock, are delivered directly from the outside supplier, instead of being backlogged. We present an analytical upper bound on the total cost of the system, and develop a heuristic method to optimize the policy parameters. Numerical experiments indicate that our technique provides a very close approximation of the exact cost. Also, we show that differentiating among the retailers and direct customer demand can yield significant cost reductions.}},
author = {{Axsäter, Sven and Kleijn, M and De Kok, TG}},
issn = {{1572-9338}},
keywords = {{allocation policy; multi-echelon; stochastic}},
language = {{eng}},
number = {{1-4}},
pages = {{177--194}},
publisher = {{Springer}},
series = {{Annals of Operations Research}},
title = {{Stock Rationing in a Continuous Review Two-Echelon Inventory Model}},
url = {{http://dx.doi.org/10.1023/B:ANOR.0000012280.68155.a3}},
doi = {{10.1023/B:ANOR.0000012280.68155.a3}},
volume = {{126}},
year = {{2004}},
}