Multi-Echelon Inventory Systems

Federgruen, A. (1993), Centralized Planning Models for Multi-Echelon Inventory Systems under Uncertainty, in Logistics of Production and Inventory, S. C. Graves, A. H. G. Rinnooy Kan and P. H. Zipkin, Eds., North-HoUand, Amsterdam, pp. 133-173. 

Cohen, M., Kamesan, PV, Kleindorfer, P, Lee, H.L., Tekerian, A. Optimizer IBM s Multi-Echelon Inventory System for Managing Service Logistics. Interfaces, 20(1) 65—82, January—February 1990. 

Dong, L., H.L. Lee. 2001. Optimal policies and approximations for a serial multi-echelon inventory system with time correlated demand. Working Paper. Washington University and Stanford University. 

Erkip, N., W.H. Hausman, S. Nahmias. 1990. Optimal centralized ordering policies in multi-echelon inventory systems with correlated demands. Man-agementScl 36 (3) 381-392. 

Cohen, M.A., P. Kleindorfer, and H.L. Lee, OPTIMIZER A Multi-Echelon Inventory System For Service Logistics Management, Interfaces, 20, 1 (1990), 65-82. 

We continue to build on these basic models throughout the chapter, using them to explore various inventory policies for single-item systems, policies for multi-item inventory systems, and ultimately working our way up to multi-echelon inventory systems. In all cases, however, we continue to... 

Given the broad discussion in this chapter, one can see that computing inventory control parameters for even relatively simple multi-echelon systems— e.g., a two-stage, serial system with fixed ordering costs, or a three-stage, serial system without fixed cosfs— is a complex endeavor. Unfortunately, finding even approximately optimal solutions to more extensive systems is even more challenging, and beyond the scope of this book. While interested readers can consult the end-of-chapter references for extensions to the problems considered in this chapter, we believe that a few additional comments about multi-echelon inventory systems are warranted. 

Deleersnyder JL, Hodgson TJ, King RE, O Grady PJ, Savva A (1992) Integrating kanban type pull systems and MRP type push systems insights from a Markovian model. HE Trans 24 43-56 Diks EB, De Kok AG (1998) Optimal control of a divergent multi-echelon inventory system. Eiu J Oper Res 111 75—97... 

Moinzadeh, K. 2002. A multi-echelon inventory system with information exchange. Management Science 48 (3) 415-426. 

In this section we determine approximative estimates of the downtime costs. We first estimate the waiting time for spare parts. Based on the estimated waiting time, we estimate the fraction of time that each functional group has a certain mnnber of defective equipment. This approximate analysis of the system is based on the analysis of multi echelon inventory control for recoverable items in the METRIC model (Sherbrooke 1968). Based on these average long term time fractions, we can calculate the long term average downtime costs in the system. 

S. Whang. 1999. Decentralized multi-echelon inventory control systems Incentives and information. Management Sci. 45 (5) 633-640. 

The benchmark case is of greater stand-alone interest when the network exhibits complexities such as stochastic demand that is filtered through the inventory policies implemented at the successive echelons, intricate cost structures, lead times, and multiple time periods of activity. This is the theme of the bulk of multi-echelon inventory theory, dating back to the serial supply chain analysis of Clark and Scarf (1960). This literature also considers system architectures that move product from a manufacturer to end customers along, multiple parallel paths, such as a 1-depot N-warehouse network. 

In general, inventory can be positioned at each tier of the supply chain. While it increases responsiveness, it causes decision making to become complex. Such a system with multiple tradeoffs is modeled as multi echelon inventory optimization. 

Saberi, S., Nookabadi, A.S., Hejazi, S.R. Applying agent-based system and negotiation mechanism in improvement of inventory management and customer order fidfilment in multi echelon supply chain. Arab. J. Sci. Eng. 37(3), 851-861 (2012)... 

Sherbrooke, C.C./ OPTIMAL INVENTORY MODEUNG OF SYSTEMS Multi-Echelon Techniques, Second Edition... 

Lagodimos, A. G. 1992. Multi-echelon service models for inventory systems under different rationing policies. International Journal of Production Research 30 939-958. Lagodimos, A. G., and Koukoumialos, S. 2008. Service performance of two-echelon supply chains under linear rationing. International Journal of Production... 

Sherbrooke/ OPTIMAL INVENTORY MODELING OP SYSTEMS Multi-Echelon Techniques,... 

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