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Inventory/distribution control system in a one-warehouse/multi-retailer supply chain

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  • Monthatipkul, Chumpol
  • Yenradee, Pisal

Abstract

This paper proposes a new inventory control system called the inventory/distribution plan (IDP) control system for a one-warehouse/multi-retailer supply chain. In the IDP control system, a proposed mixed-integer linear programming model is solved to determine an optimal IDP that controls the inventories of the supply chain. The efficiency of the IDP control system is compared to that of the echelon-stock R,s,S control policy, where R is a periodic review interval, s is a reorder point, and S is an order-up-to level, at various fill rates. The experimental results show that when the system faces non-stationary demands, the IDP control system significantly outperforms the echelon-stock R,s,S control system because it can give lower total costs for all ranges of fill rates.

Suggested Citation

  • Monthatipkul, Chumpol & Yenradee, Pisal, 2008. "Inventory/distribution control system in a one-warehouse/multi-retailer supply chain," International Journal of Production Economics, Elsevier, vol. 114(1), pages 119-133, July.
    • Handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:119-133
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    2. Visentin, Andrea & Prestwich, Steven & Rossi, Roberto & Tarim, S. Armagan, 2021. "Computing optimal (R,s,S) policy parameters by a hybrid of branch-and-bound and stochastic dynamic programming," European Journal of Operational Research, Elsevier, vol. 294(1), pages 91-99.
    3. Adam Marcysiak, 2020. "The scope of diversification of the warehouse space market in a regional configuration," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 10-23, September.
    4. Yaqing Xu & Jiang Zhang & Zihao Chen & Yihua Wei, 2021. "Single-Manufacturer Multi-Retailer Supply Chain Models with Discrete Stochastic Demand," Sustainability, MDPI, vol. 13(15), pages 1-13, July.
    5. Berling, Peter & Farvid, Mojtaba, 2014. "Lead-time investigation and estimation in divergent supply chains," International Journal of Production Economics, Elsevier, vol. 157(C), pages 177-189.

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