Article ID: | iaor200964572 |
Country: | United States |
Volume: | 10 |
Issue: | 2 |
Start Page Number: | 198 |
End Page Number: | 203 |
Publication Date: | Apr 2008 |
Journal: | Manufacturing & Service Operations Management |
Authors: | Cheung Ki Ling, Zhang Sheng Hao |
Keywords: | scheduling, inventory: order policies |
This paper studies a supply chain with one supplier and multiple heterogeneous retailers where base–stock policies are practiced. The supplier's performance, in terms of optimal cost, optimal stocking level, and implied service level, is investigated under different retailer replenishment sequences. We show that under many realistic demand distributions, it is optimal to sequence retailers according to ascending variability. Furthermore, if the retailers vary in magnitudes of their orders, then the optimal sequence is usually the one with descending magnitudes.