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Optimal inventory policies in decentralized supply chains

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  • Li, Xiaoming

Abstract

This paper studies the inventory behavior of autonomous and self-serving firms in a decentralized retailer-manufacturer serial supply chain. We first analytically characterize the optimal inventory policies for each firm both with and without information sharing, revealing an inherent simple structure of optimal inventory behavior: replenishments are triggered by ultimate customer demand directly. We then consider various extensions: (1) N-stage serial systems, (2) batch ordering policies, (3) fixed setup costs, and (4) Markovian customer demand.

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  • Li, Xiaoming, 2010. "Optimal inventory policies in decentralized supply chains," International Journal of Production Economics, Elsevier, vol. 128(1), pages 303-309, November.
    • Handle: RePEc:eee:proeco:v:128:y:2010:i:1:p:303-309
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    Cited by:

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    2. Katsoulacos, Yannis & Ulph, David, 2017. "Regulatory decision errors, Legal Uncertainty and welfare: A general treatment," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 326-352.

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