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Single cycle policies for the one-warehouse N-retailer inventory/distribution system

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  • Abdul-Jalbar, Beatriz
  • Gutiérrez, Jose M.
  • Sicilia, Joaquín

Abstract

We address a multi-echelon inventory system with one-warehouse and N-retailers. The demand at each retailer is assumed to be known and satisfied by the warehouse. Shortages are not allowed and lead times are negligible. Costs at each facility consist of a fixed charge per order and a holding cost. The goal is to determine single-cycle policies which minimize the average cost per unit time, that is, the sum of the average holding and setup costs per unit time at the retailers and at the warehouse. We propose a O(NlogN) heuristic procedure to compute efficient single-cycle policies. This heuristic is compared with other approaches proposed by Schwarz, Graves and Schwarz and Muckstadt and Roundy. We carry out a computational study to test the effectiveness of the heuristic and to compare the performance of the different procedures. From the computational results, it is shown that the new heuristic provides, on average, better single-cycle policies than those given by the Muckstadt and Roundy method.

Suggested Citation

  • Abdul-Jalbar, Beatriz & Gutiérrez, Jose M. & Sicilia, Joaquín, 2006. "Single cycle policies for the one-warehouse N-retailer inventory/distribution system," Omega, Elsevier, vol. 34(2), pages 196-208, April.
    • Handle: RePEc:eee:jomega:v:34:y:2006:i:2:p:196-208
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    References listed on IDEAS

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    1. Leroy B. Schwarz, 1973. "A Simple Continuous Review Deterministic One-Warehouse N-Retailer Inventory Problem," Management Science, INFORMS, vol. 19(5), pages 555-566, January.
    2. Andrew J. Clark & Herbert Scarf, 2004. "Optimal Policies for a Multi-Echelon Inventory Problem," Management Science, INFORMS, vol. 50(12_supple), pages 1782-1790, December.
    3. Robin Roundy, 1985. "98%-Effective Integer-Ratio Lot-Sizing for One-Warehouse Multi-Retailer Systems," Management Science, INFORMS, vol. 31(11), pages 1416-1430, November.
    4. Stephen C. Graves & Leroy B. Schwarz, 1977. "Single Cycle Continuous Review Policies for Arborescent Production/Inventory Systems," Management Science, INFORMS, vol. 23(5), pages 529-540, January.
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    Cited by:

    1. Levner, Eugene & Perlman, Yael & Cheng, T.C.E. & Levner, Ilya, 2011. "A network approach to modeling the multi-echelon spare-part inventory system with backorders and interval-valued demand," International Journal of Production Economics, Elsevier, vol. 132(1), pages 43-51, July.
    2. Hoque, M.A., 2011. "Generalized single-vendor multi-buyer integrated inventory supply chain models with a better synchronization," International Journal of Production Economics, Elsevier, vol. 131(2), pages 463-472, June.
    3. Lee, Dong Joo & Jeong, In-Jae, 2010. "A distributed coordination for a single warehouse-multiple retailer problem under private information," International Journal of Production Economics, Elsevier, vol. 125(1), pages 190-199, May.
    4. Nekoiemehr, Nooshin & Zhang, Guoqing & Selvarajah, Esaignani, 2019. "Due date quotation in a dual-channel supply chain," International Journal of Production Economics, Elsevier, vol. 215(C), pages 102-111.
    5. Abdul-Jalbar, Beatriz & Gutiérrez, José M. & Sicilia, Joaquín, 2009. "A two-echelon inventory/distribution system with power demand pattern and backorders," International Journal of Production Economics, Elsevier, vol. 122(2), pages 519-524, December.
    6. Alawneh, Fawzat & Zhang, Guoqing, 2018. "Dual-channel warehouse and inventory management with stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 112(C), pages 84-106.
    7. Godichaud, Matthieu & Amodeo, Lionel, 2018. "Economic order quantity for multistage disassembly systems," International Journal of Production Economics, Elsevier, vol. 199(C), pages 16-25.
    8. Hsiao, Yu-Cheng, 2008. "Optimal single-cycle policies for the one-warehouse multi-retailer inventory/distribution system," International Journal of Production Economics, Elsevier, vol. 114(1), pages 219-229, July.
    9. Beatriz Abdul-Jalbar & Roberto Dorta-Guerra & José M. Gutiérrez & Joaquín Sicilia, 2021. "Production/Inventory Policies for a Two-Echelon System with Credit Period Incentives," Mathematics, MDPI, vol. 9(15), pages 1-25, July.
    10. Yao, Dong-Qing & Yue, Xiaohang & Mukhopadhyay, Samar K. & Wang, Ziping, 2009. "Strategic inventory deployment for retail and e-tail stores," Omega, Elsevier, vol. 37(3), pages 646-658, June.
    11. Hoque, M.A., 2008. "Synchronization in the single-manufacturer multi-buyer integrated inventory supply chain," European Journal of Operational Research, Elsevier, vol. 188(3), pages 811-825, August.
    12. Carvajal, Jimmy & Castaño, Fabian & Sarache, William & Costa, Yasel, 2020. "Heuristic approaches for a two-echelon constrained joint replenishment and delivery problem," International Journal of Production Economics, Elsevier, vol. 220(C).

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