Modeling Emergency Supply Flexibility in a Two-Echelon Inventory System

Patrik Alfredsson and Jos Verrijdt
Additional contact information
Patrik Alfredsson: Systecon AB, Box 5205, SE-102 45 Stockholm, Sweden
Jos Verrijdt: Eindhoven University of Technology, Faculty of Technology Management, Paviljoen F16, P.O. Box 513, 5600 MB, The Netherlands

Management Science, 1999, vol. 45, issue 10, 1416-1431

Abstract: We consider a two-echelon inventory system for service parts. To obtain high service levels at a low cost we allow not only for normal supply of parts but also for emergency supply options in terms of lateral transshipments and direct deliveries. After presenting the strategy we use for satisfying customer demand, we construct an analytical model that we use to calculate relevant performance measures. Simulation shows that our model produces accurate estimates, and that the performance of the inventory system is insensitive to the lead-time distribution. After introducing a cost structure we show that the strategy we propose can result in considerable savings when compared to using only normal supply. Comparison of the results of our model with the results of other models indicates that the combined use of lateral transshipments and direct deliveries can lead to significant cost savings.

Keywords: inventory control; service parts; emergency supply (search for similar items in EconPapers)
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (68)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.45.10.1416 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:45:y:1999:i:10:p:1416-1431

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().