Inventory Positioning in Multiple Product Supply Chains

George Ioannou, Gregory Prastacos and Georgia Skintzi

Annals of Operations Research, 2004, vol. 126, issue 1, 195-213

Abstract: In this paper we address the problem of inventory positioning, i.e., the determination of the supply chain node where inventory should be held, to minimize holding costs given a pre-specified order fill rate. A single-echelon inventory system with multiple products models the problem. The value of inventory is assumed to be an increasing function of the amount of processing performed at upstream nodes, while achieved fill-rates are dependent on the distance or time between the inventory storage and customer locations. We propose a novel analytical approach to solve the problem for the case of normally distributed demand that is based on iterative calculations of inventory holding costs at the various potential inventory locations. Copyright Kluwer Academic Publishers 2004

Keywords: inventory management; supply chain design (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1023/B:ANOR.0000012281.60737.a1

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