Article ID: | iaor20011664 |
Country: | United States |
Volume: | 47 |
Issue: | 5 |
Start Page Number: | 422 |
End Page Number: | 439 |
Publication Date: | Aug 2000 |
Journal: | Naval Research Logistics |
Authors: | Chen Fangruo |
Consider a distribution system with a central warehouse and multiple retailers. Customer demand arrives at each of the retailers continuously at a constant rate. The retailers replenish their inventories from the warehouse which in turn orders from an outside supplier with unlimited stock. There are economies of scale in replenishing the inventories at both the warehouse and the retail level. Stockouts at the retailers are backlogged. The system incurs holding and backorder costs. The objective is to minimize the long-run average total cost in the system. This paper studies the cost effectiveness of