Inventory performance under pack size constraints and spatially-correlated demand

Xi Steven Yan, David J. Robb and Edward A. Silver

International Journal of Production Economics, 2009, vol. 117, issue 2, 330-337

Abstract: Motivated by a problem facing a large retailer, we consider the impact of pack size on the performance of a periodic review inventory system in the presence of spatial (i.e., between retailers) correlation of demand--which we model using an equicorrelated multivariate Poisson distribution. Employing simulation, we utilise a full factorial experiment to provide support for decisions on product and supplier selection, and whether or not packs should be split during distribution. We consider variables such as pack size, correlation, and the number of branches, and discuss how they and their interactions impact performance metrics such as inventory and shortage levels and the bullwhip effect.

Keywords: Supply; Chain; Management; Pack; Size; Distribution; Correlated; demand; Bullwhip; effect (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:117:y:2009:i:2:p:330-337

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