On two-echelon inventory systems with Poisson demand and lost sales

Elisa Alvarez and Matthieu van der Heijden

European Journal of Operational Research, 2014, vol. 235, issue 1, 334-338

Abstract: We consider a two-echelon, continuous review inventory system under Poisson demand and a one-for-one replenishment policy. Demand is lost if no items are available at the local warehouse, the central depot, or in the pipeline in between. We give a simple, fast and accurate approach to approximate the service levels in this system. In contrast to other methods, we do not need an iterative analysis scheme. Our method works very well for a broad set of cases, with deviations to simulation below 0.1% on average and below 0.36% for 95% of all test instances.

Keywords: Inventory; Two-echelon system; Spare parts; Lost sales; Approximation (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:235:y:2014:i:1:p:334-338

DOI: 10.1016/j.ejor.2013.12.031

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