Multi-echelon systems: A service measure perspective

This paper reviews the most important results on divergent multi-echelon systems. In particular, we concentrate on the interactions between the elements that constitute such a multi-echelon system, in order to determine several service measures (e.g. external customer service level and inventory holding costs). We distinguish between two types of policies: installation stock and echelon stock policies. A comparison between these two types of policies revealed that the complexity of the analysis is concentrated at different aspects, which are discussed by reviewing the most important papers on both types. Special attention is given to the applicability of the models. Extensions to divergent multi-echelon systems with more than two stages are also treated.