Article ID: | iaor200263 |
Country: | Netherlands |
Volume: | 71 |
Issue: | 1/3 |
Start Page Number: | 255 |
End Page Number: | 261 |
Publication Date: | Jan 2001 |
Journal: | International Journal of Production Economics |
Authors: | Axsater Sven |
Keywords: | multi-echelon system |
A two-echelon distribution inventory system with stochastic demand is considered. Existing methods for evaluation and optimization of continuous review (R,Q)-policies are usually very efficient in case of relatively low demand. For systems with high demand an evaluation may be very time consuming. We suggest and evaluate a technique where a high-demand system is approximated by a low-demand system. The real customer demand is scaled down such that the ratio between standard deviation and mean is preserved. Then the low-demand system is optimized. Finally, the solution is scaled up to fit the original high-demand system.