We consider a two-echelon distribution system in which a supplier distributes a product to N competing retailers. The demand rate of each retailer depends on all of the retailers’ prices, or alternatively, the price each retailer can charge for its product depends on the sales volumes targeted by all of the retailers. The supplier replenishes his inventory through orders (purchases, production ...

We consider a two-stage serial supply chain with capacity limits, where each installation is operated by managers attempting to minimize their own costs. A multiple-period model is necessitated by the multiple stages, capacity limits, stochastic demand, and the explicit consideration of inventories. With appropriate salvage value functions, a Markov equilibrium policy is found. Intuitive profit...

Inventory is lifeblood in an organization. Multiechelon inventory of Olympia paper mill, Khyber Pakhtonkhwa is optimized by efficient management of the organizational supply chain (SC). A supply chain is designed starting from raw material receiving from supplier up to finished good delivered to the customer. The on-going setup of the selected organization is traditional based on the experience...

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.

We consider N-stage serial production/distribution systems with stationary demand at the most downstream stage. First, we study classical Clark-Scarf model with both average cost and discounted cost criteria. The optimal echelon base-stock levels are obtained in terms of only probabilistic distributions of leadtime demand. This analysis yields a novel approach for developing bounds and simple h...

T paper studies a buyer’s procurement strategies in a two-stage supply chain with price-sensitive demand. The buyer procures a product from a supplier and then sells to the marketplace. Market demand is stochastic and depends on the buyer’s selling price. The supplier’s production cost is private information, and the buyer only knows the distribution of the cost. Both the buyer and the supplier...

Abstract: This study relies on integrated inventory theory which merges with the supply chain concept and aims at the steel bar material of precast factory’s two-echelon supply chain system. In order to consider the variable demand rate, unfixed supply time, unfixed supply frequency and unfixed supply quantity, this study builds a strategic model that minimizes the total inventory cost of all p...

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...

One of the main supply chain deficiencies is the bullwhip effect: demand fluctuations increase as one moves up the supply chain from retailer to manufacturer. The Beer Distribution Game is widely known for illustrating these supply chain dynamics in class. In this paper we present a spreadsheet application, exploring the two key causes of the bullwhip effect: demand forecasting and the type of ...