Multi-echelon multi-company inventory planning with limited information exchange

J C Fransoo (), M J F Wouters and T G de Kok
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J C Fransoo: Technische Universiteit Eindhoven
M J F Wouters: Technische Universiteit Eindhoven
T G de Kok: Technische Universiteit Eindhoven

Journal of the Operational Research Society, 2001, vol. 52, issue 7, 830-838

Abstract: Abstract Supply chain planning concepts from multi-echelon inventory theory are generally based on some form of centralised planning of supply chains. Those multi-echelon models that do consider decentralised planning, assume complete information and/or a specific single objective function. This paper investigates how multi-echelon inventory theory can accommodate a setting with decentralised decision makers (a supplier and a number of retail groups) without complete information. We present a coordination procedure that does not require the retail groups to exchange demand information, but does allow using opportunities for demand pooling between them. We illustrate our ideas by way of a quantitative analysis of a two-echelon divergent supply chain, with both cooperative and non cooperative retail groups. We conclude that coordination across a supply chain with decentralised control and limited centralised information is feasible by using available algorithms with satisfactory service level and cost performance.

Keywords: supply chain management; inventory control; distribution; allocation (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:pal:jorsoc:v:52:y:2001:i:7:d:10.1057_palgrave.jors.2601162

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DOI: 10.1057/palgrave.jors.2601162

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