Evaluation of One-for-One Replenishment Policies for Multiechelon Inventory Systems

Antony Svoronos and Paul Zipkin
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Antony Svoronos: Columbia University Graduate School of Business, New York, New York 10027
Paul Zipkin: Columbia University Graduate School of Business, New York, New York 10027

Management Science, 1991, vol. 37, issue 1, 68-83

Abstract: This paper is concerned with multiechelon inventory systems, where each demand triggers a separate order (one-for-one replenishment policies). The exogenous demands are independent Poisson processes. The transit times between locations may be stochastic. The way we model these transit times follows closely the standard treatment of stochastic leadtimes in single-location models. This is different, however, from the usual approach in the multiechelon setting (e.g., METRIC). We describe simple methods for computing or approximating the steady-state behavior of the system. The results show that, in sharp contrast to prior multiechelon models, transit-time variances play an important role in system performance.

Keywords: inventory/production; multiechelon; issuing policies (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:37:y:1991:i:1:p:68-83

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