In this paper, a supplier-retailer transportation system is investigated as a two-echelon environment. There is a single location in each echelon; the unique supplier at the first echelon has to replenish the retailer's warehouse at the second echelon. By the way, the shortage situation should be avoided. For this situation, a model is provided based on the traditional EOQ model. The inventory ...

The theory on multi-echelon production/inventory systems is a core theory within supply chain management. It provides useful insights for design of supply chains and may be used for tactical and operational planning decisions. The multi-echelon theory started with the seminal paper of Clark and Scarf in 1960. In this tutorial, we describe for which systems optimal policies are known, which key ...

This paper presents a study of a coordinated production inventory-system. In the proposed model, any echelon considers its successors as part of its inventory system and generates the replenishment order on the basis of operational information of its partners. We show that the coordinated decision making allows elimination of information distortion along the chain. Furthermore, we show how the ...

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.

Nowadays, Companies have to deal with an uncertain demand which is more difficult to handle when it has a non-stationary pattern. Simultaneous decrease of customer service and increase of stock costs are the most significant effects of such demand uncertainty. To deal with this issue, inventory optimization models must be adapted to cover a multi-echelon network structure and to consider altern...

Devising manufacturing/distribution strategies for supply chains and determining their parameter values have been challenging problems. Linking production management to stock keeping processes improves the planning of the supply chain activities, including material management, culminating in improved customer service levels. In this study, we investigate a multi-echelon supply chain consisting ...

In this paper, we establish the convexity of important cost functions in a general class of multi-echelon inventory models. In particular, we first study an assembly system with a single finished product managed using an echelon order-up-to policy. We show that the shortage penalty cost over any horizon is jointly convex with respect to the base-stock levels and capacity levels. Our second resu...

This paper demonstrates optimal policies for capacitated serial multiechelon production/inventory systems. Extending the Clark and Scarf (1960) model to include installations with production capacity limits, we demonstrate that a modified echelon base-stock policy is optimal in a two-stage system when there is a smaller capacity at the downstream facility. This is shown by decomposing the dynam...

This article addresses the development of an integrated supplier selection and inventory control problems in supply chain management by developing a mathematical model for a multi-echelon system. In particular, a buyer firm that consists of one warehouse and N identical retailers wants to procure a product from a group of potential suppliers, which may require different price, ordering cost, le...