Exact and approximate evaluation of batch-ordering policies for two-level inventory systems

Exact and approximate evaluation of batch-ordering policies for two-level inventory systems

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Article ID: iaor19941330
Country: United States
Volume: 41
Issue: 4
Start Page Number: 777
End Page Number: 785
Publication Date: Jul 1993
Journal: Operations Research
Authors:
Keywords: stochastic processes
Abstract:

The paper considers a two-level inventory system with one warehouse and N identical retailers. Lead times (transportation times) are constant and the retailers face independent Poisson demand. In a previous paper, a recursive procedure was derived for determining the policy costs for an average item in case of one-for-one replenishment policies. In this paper it is shown how these results can be used for the exact or approximate evaluation of more general policies where both the retailers and the warehouse order in batches. The present methods are compared to the method recently suggested by A. Svoronos and P. Zipkin.

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