 A model for heuristic coordination of real life distribution inventory systems with lumpy demandPeter Berling and Johan Marklund European Journal of Operational Research, 2013, vol. 230, issue 3, 515-526 Abstract: This paper presents an approximation model for optimizing reorder points in one-warehouse N-retailer inventory systems subject to highly variable lumpy demand. The motivation for this work stems from close cooperation with a supply chain management software company, Syncron International, and one of their customers, a global spare parts provider. The model heuristically coordinates the inventory system using a near optimal induced backorder cost at the central warehouse. This induced backorder cost captures the impact that a reorder point decision at the warehouse has on the retailers’ costs, and decomposes the multi-echelon problem into solving N+1 single-echelon problems. The decomposition framework renders a flexible model that is computationally and conceptually simple enough to be implemented in practice. Keywords: Inventory/production; Multi-echelon; Policies; Continuous review; Stochastic; Poisson demand (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:230:y:2013:i:3:p:515-526 DOI: 10.1016/j.ejor.2013.04.053 Access Statistics for this article European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati More articles in European Journal of Operational Research from Elsevier |
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