Cyclical schedules for one-warehouse, multi-retailer systems with dynamic demands

In a one-warehouse, multi-retailer system, a cyclical schedule is characterised by fixed order intervals at the warehouse and retailers. Cyclical schedules offer advantages in terms of simplicity and ease of control, but under dynamic demand conditions they are higher in cost than non-cyclical schedules. This study presents a mathematical formulation of the cyclical problem, and then outlines an algorithm to obtain optimal solutions. An experiment is then conducted to investigate the additional cost of cyclical schedules as a function of problem characteristics relevant to one-warehouse, multi-retailer systems. Results show that coefficient of demand variation has the strongest effect on the additional cost of cyclical scheduling. However, even at relatively high levels of demand variation, the additional costs of cyclical scheduling are quite moderate.