Evaluation of Installation Stock Based (R, Q)-Policies for Two-Level Inventory Systems with Poisson Demand

Sven Axsäter
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Sven Axsäter: Lund University, Lund, Sweden

Operations Research, 1998, vol. 46, issue 3-supplement-3, S135-S145

Abstract: We consider a two-level inventory system with one warehouse and N retailers. Leadtimes (transportation times) are constant, and the retailers face different Poisson demand processes. All facilities apply continuous review installation stock ( R , Q )-policies with different reorder points and batch quantities. We show how to evaluate holding and shortage costs exactly in case of two retailers. In case of more than two retailers we use the same methodology as an approximation. When evaluating costs at a certain retailer, the other retailers are then aggregated into a single retailer.

Keywords: Inventory/production; multiechelon; batch-ordering policies; continuous review; Inventory/production; stochastic; Poisson demand (search for similar items in EconPapers)
Date: 1998
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