Evaluation of divergent N-echelon (s,nQ) policies under compound renewal demand

G.P. Kiesmüller, A.G. Kok, de, S.R. Smits, P.J.M. Laarhoven, van

Research output: Contribution to journalArticleAcademicpeer-review

20 Citations (Scopus)
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Abstract

In this paper, decentralized inventory control in a divergent multi-echelon network is considered. All stockpoints are controlled by continuous review (s,nQ)-installation stock policies. Due to the fact that orders from a stockpoint to its predecessors may have to wait, this delay must be incorporated into the lead time of an arbitrary replenishment. We develop analytical approximations for the first two moments of this waiting time. These results enable us to accurately approximate the relevant performance characteristics at each stockpoint, given its (s,nQ)-policy. The performance measure considered in this paper are fill rate and average physical inventory. The analysis can easily be extended for other performance measures. The main contribution of this paper is the fact that the results apply to arbitrary divergent multi-echelon systems, with stochastic transportation times, arbitrary lot sizes and compound renewal demand.
Original languageEnglish
Pages (from-to)547-577
JournalOR Spektrum
Volume26
Issue number4
DOIs
Publication statusPublished - 2004

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