We consider inventory control in a two-echelon divergent network, consisting of a central depot and multiple (non-identical) local warehouses. Past research has shown that (R, S) order-up-to control rules for this system type can easily be obtained using a decomposition approach, where the derivation of the order-up-to level S is separated from the derivation of the rationing parameters. We sho...

Stochastic inventory control in multi-echelon systems poses hard problems in optimisation under uncertainty. Stochastic programming can solve small instances optimally, and approximately solve large instances via scenario reduction techniques, but it cannot handle arbitrary nonlinear constraints or other nonstandard features. Simulation optimisation is an alternative approach that has recently ...

Globalization, product proliferation, and fast product innovation have significantly increased the complexities of supply chains in many industries. One of the most important advancements of supply chain management in recent years is the development of models and methodologies for controlling inventory in general supply networks under uncertainty and their widefspread applications to industry. ...

In this article we present an effective mixed-integer linear programming (MILP) formulation for design of a multi-echelon stochastic inventory system with uncertain customer demands. In You and Grossmann [2010] a three-echelon supply chain with inventories under uncertainty is presented. In that supply chain, the location of the plants and the customer demand zones (CDZ) are known. Potential di...

In this work we deal with multilevel integrated distribution problems and in particular, we analyse the management of inventories of final goods in the distribution system. We present a survey of methods proposed in the recent literature devoted to the integration of inventory management systems. Starting from the concept of echelon inventory position we present an approach for the optimal flow...

Managing inventory in distribution systems involves taking decisions on the quantity of inventory to be placed at different stages so that a desired customer service level can be achieved at minimum cost. In this paper, we present the case of the distribution system of an Indian FMCG company, which despite having centralized control takes replenishment decisions based on local stock information...

This paper considers a two-echelon capacitated supply chain with two non-identical retailers and information sharing. We characterize the optimal inventory policies. We also study the benefits of the optimal stock rationing policy over the first come first served (FCFS) and the modified echelon-stock rationing (MESR) policies. © 2006 Elsevier B.V. All rights reserved.