Multilocation Inventory Systems With Centralized Information.

The management of multi-echelon inventory systems has been both an important and challenging research area for many years. The rapid advance in information technology and the emphasis on integrated supply chain management have new implications for the successful operation of distribution systems. This research focuses on the study of some fundamental issues related to the operation of a multilocation inventory system with centralized information. First, we do a comparative analysis to evaluate the overall performance of individual versus centralized ordering policies for a multi-store distribution system where centralized information is available. This study integrates the existing research and clarifies one of the fundamental questions facing inventory managers today: whether or not ordering decisions should be centralized. Next, we consider a multi-store distribution system where emergency transshipments are permitted among these stores. Based on some simplifying assumptions, we develop an integrated model with a joint consideration of inventory and transshipment components. An approximately optimal (s, S) policy is obtained through a dynamic programming technique. This ordering policy is then compared with a simplified policy that assumes free and instantaneous transshipments. We also examine the relative performance of base stock policies for a centralized-ordering distribution system. Numerical studies are provided to give general guidelines for use of the policies

Routing and Inventory Allocation Policies in Multi-Echelon Distribution Systems

This paper reviews the previous research in the area of logistics systems, especially in the area of the multi-echelon distribution system with stochastic demand. Many researches in this area emphasize the value of real-time information (which is more readily available nowadays by use of EDS or satellite systems) in distribution-related decisions. Also a great deal of efforts has been taken to study the risk-pooling effect of the various distribution policies in the multi-echelon systems. The objectives of this review are two-folded; (1) to help readers to understand the research paradigm in the multi-echelon area, and (2) to help them to find future research topics not yet explored

Cost Effectiveness of Postponed Routing Decisions in a Supply Chain

This paper examines the cost-reduction effect of postponed routing decisions in a two-echelon supply chain. When a delivery vehicle leaves the warehouse with system replenishment quantities, it sequentially makes routing decisions to choose the next retailer to visit. To measure this effect this paper studies combined vehicle routing and inventoryallocation policies designed to minimize total expected purchasing, inventory-holding and backordering cost/period for a one-warehouse Nretailer symmetric distribution system. Using a numerical study, we demonstrate that optimal dynamic routing and allocation policies can significantly reduce the inventory-management costs associated with fixed routing and dynamic allocation in medium-to-large customer demand-variance scenarios

Reducing costs of repairable spare parts supply systems via dynamic scheduling

We study a system consisting of one repair shop and one stockpoint, where spare parts of repairables are kept on stock to serve an installed base of systems. Part requests are met from stock if possible, and backordered otherwise. Our objective is to determine initial stock levels and a policy for scheduling repair jobs such that holding and backorder cost are minimized. We propose two dynamic scheduling rules, compare their performance with the static priority rule, and show that even when stock levels and static priorities have been optimized simultaneously, dynamic scheduling rules often reduce total cost by more than 10%