We derive approximations for the service levels of two-echelon inventory systems with lost sales and Poisson demand. Our method is simple and accurate for a very broad range of problem instances, including cases with both high and low service levels. In contrast, existing methods only perform well for limited problem settings, or under restrictive assumptions.

We consider a two-echelon single commodity inventory system with one warehouse(supplier) at the higher echelon and one retailer at the lower echelon. The retailer stocks individual items of a commodity and satisfies unit demands which occur according to a Poisson process. The supplier stocks these items in packets and uses these packetsto: (i) satisfy the demands that occur for single packet an...

Wepresent a new proof of the optimality of echelon order-up-to policies in serial inventory systems, first proved by Clark and Scarf. Our proof is based on a sample-path analysis as opposed to the original proof based on dynamic programming induction. © 2008 Elsevier B.V. All rights reserved.

In a production-inventory system, the manufacturer produces the items at a rate, e.g. R, dispatches the order quantities to the customers in specific intervals and stores the excess inventory for subsequent deliveries. Therefore each inventory cycle of the manufacturer can be divided into two phases, first is the period of production, the second is when the manufacturer does not do any producti...

We consider periodic review inventory control problems in directed networks, primary examples of which are distribution systems and assembly systems. External demand could occur at each node. When inventory is insufficient to meet requirements at a node, a portion of this demand is backordered and the remaining is lost. External demands, as well as lead times for inventory purchase, assembly, a...

In this paper, we consider a Markovian model for a two-echelon inventory/return system. The system consists of a supply plant with infinite capacity and a central warehouse for inventory and returns. There are also a number of local warehouses which are also capable of re-manufacturing of returns to products. To obtain a high service level of handling inventory and returns, lateral transshipmen...

Members of supply chain carry inventory for different purposes. To effectively reduce the cost of inventory, information sharing mechanism is the key. The inventory can be managed in two ways in supply chain systems. The first one is the centralized inventory management system, in which, the information of inventory is highly exchanged among supply chain members. The other is the decentralized ...

Lateral transshipments within an inventory system are stock movements between locations of the same echelon. These transshipments can be conducted periodically at predetermined points in time to proactively redistribute stock, or they can be used reactively as a method of meeting demand which cannot be satisfied from stock on hand. The elements of an inventory system considered, e.g. size, cost...