Kybernetika 53 no. 3, 461-479, 2017

Approximate evaluation of continuous review (R,Q) policies in two-echelon inventory systems with stochastic transportation

Abdullah S. KaramanDOI: 10.14736/kyb-2017-3-0461

Abstract:

This paper considers a distribution inventory system that consists of a single warehouse and several retailers. Customer demand arrives at the retailers according to a continuous-time renewal process. Material flow between echelons is driven by reorder point/order quantity inventory control policies. Our objective in this setting is to calculate the long-run inventory, backorder and customer service levels. The challenge in this system is to characterize the demand arrival process at the warehouse. We present a Markovian methodology to elucidate and approximate this process. We illustrate the use of this methodology in the distribution inventory system under stochastic transportation times with identical and non-identical retailers.

Keywords:

inventory control, Markovian analysis, stochastic lead-times, distribution inventory systems

Classification:

60J27, 90B05

paper.pdf

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