Article ID: | iaor20033064 |
Country: | United States |
Volume: | 49 |
Issue: | 2 |
Start Page Number: | 247 |
End Page Number: | 253 |
Publication Date: | Feb 2003 |
Journal: | Management Science |
Authors: | Axster Sven |
A continuous review serial production/distribution system with discrete compound Poisson demand for the end product is considered. Unmet demand is back-ordered. Production/transportation times are constant. All deliveries from one stage to the next must be multiples of given batch sizes. We consider the problem of minimizing the holding costs under a fill rate constraint. Using recent results by Chen, we show that under a set of restricted but plausible assumptions, the optimal policy is an echelon stock multistage