Echelon stock based continuous review (R, Q) policy for fast moving items

The superior performance of echelon stock based policies for multi-stage serial and assembly inventory systems has been well established in literature. De Bodt and Graves were the first to develop an echelon stock based continuous review (R, Q) model for a two-stage serial system. In this paper, we examine their model for fast moving items from the implementation point of view, and suggest a modification that not only takes care of implementation but also leads to improvement of the model under certain conditions. The results are demonstrated with the help of a numerical example.