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Optimal single-cycle policies for the one-warehouse multi-retailer inventory/distribution system

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  • Hsiao, Yu-Cheng

Abstract

This study investigates a multi-echelon inventory system with one warehouse and multiple retailers. The demand at each retailer is assumed to be known and satisfied by the warehouse. Shortages are not permitted and lead times are negligible. Additionally, order interval division (OID) and recursive tightening (RT) methods are developed to compute efficient and optimal single-cycle policies. Two theorems are proved to guarantee that the problem is solved optimally by using OID and RT methods. In other words, OID and RT methods theoretically reach the optimal solution in 100% of instances. The complexity of OID and RT methods is just O(N log N) where N denotes the number of retailers involved in the problem. Numerical examples are included to illustrate the algorithmic procedures.

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  • 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.
    • Handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:219-229
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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. 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.
    3. 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.
    4. 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.
    5. Abdul-Jalbar, B. & Gutierrez, J. & Sicilia, J., 2005. "Integer-ratio policies for distribution/inventory systems," International Journal of Production Economics, Elsevier, vol. 93(1), pages 407-415, January.
    6. Abdul-Jalbar, B. & Gutierrez, J. & Puerto, J. & Sicilia, J., 2003. "Policies for inventory/distribution systems: The effect of centralization vs. decentralization," International Journal of Production Economics, Elsevier, vol. 81(1), pages 281-293, January.
    7. 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. Hoai Le Thi & Duc Tran, 2014. "Optimizing a multi-stage production/inventory system by DC programming based approaches," Computational Optimization and Applications, Springer, vol. 57(2), pages 441-468, March.
    2. Godichaud, Matthieu & Amodeo, Lionel, 2018. "Economic order quantity for multistage disassembly systems," International Journal of Production Economics, Elsevier, vol. 199(C), pages 16-25.
    3. Zhai, Xin & Ward, James E. & Schwarz, Leroy B., 2011. "Coordinating a one-warehouse N-retailer distribution system under retailer-reporting," International Journal of Production Economics, Elsevier, vol. 134(1), pages 204-211, November.
    4. Wen-Tsung Ho & Yu-Cheng Hsiao, 2014. "Optimal Mixed Batch Shipment Policy with Variable Safety Factor for the Single-Vendor Single-Buyer Production-Inventory System," Journal of Optimization Theory and Applications, Springer, vol. 161(2), pages 648-663, May.
    5. Hsiao, Yu-Cheng & Lin, Yi & Huang, Yun-Kuei, 2010. "Optimal multi-stage logistic and inventory policies with production bottleneck in a serial supply chain," International Journal of Production Economics, Elsevier, vol. 124(2), pages 408-413, April.
    6. 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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