Abstract
This paper develops a METRIC-like method to optimize inventory allocations for low-demand items in a multi-echelon finished goods distribution system. The allocations are made by trading-off total inventory investment against service levels as measured by the stockout probabilities. We focus on a one-product three-echelon system and develop a solution procedure for such a system. We then apply that model and solution procedure to an illustrative example and compare the resulting inventory policies to optimal policies for a two-echelon system.
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© 2005 Springer-Verlag Berlin Heidelberg
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Lin, JR., Nozick, L.K., Turnquist, M.A. (2005). Inventory Allocation with Multi-echelon Service Level Considerations. In: Gervasi, O., et al. Computational Science and Its Applications – ICCSA 2005. ICCSA 2005. Lecture Notes in Computer Science, vol 3483. Springer, Berlin, Heidelberg. https://doi.org/10.1007/11424925_53
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DOI: https://doi.org/10.1007/11424925_53
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-25863-6
Online ISBN: 978-3-540-32309-9
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