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Multi-echelon multi-company inventory planning with limited information exchange

Author

Listed:
  • J C Fransoo

    (Technische Universiteit Eindhoven)

  • M J F Wouters

    (Technische Universiteit Eindhoven)

  • T G de Kok

    (Technische Universiteit Eindhoven)

Abstract

Supply chain planning concepts from multi-echelon inventory theory are generally based on some form of centralised planning of supply chains. Those multi-echelon models that do consider decentralised planning, assume complete information and/or a specific single objective function. This paper investigates how multi-echelon inventory theory can accommodate a setting with decentralised decision makers (a supplier and a number of retail groups) without complete information. We present a coordination procedure that does not require the retail groups to exchange demand information, but does allow using opportunities for demand pooling between them. We illustrate our ideas by way of a quantitative analysis of a two-echelon divergent supply chain, with both cooperative and non cooperative retail groups. We conclude that coordination across a supply chain with decentralised control and limited centralised information is feasible by using available algorithms with satisfactory service level and cost performance.

Suggested Citation

  • J C Fransoo & M J F Wouters & T G de Kok, 2001. "Multi-echelon multi-company inventory planning with limited information exchange," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(7), pages 830-838, July.
    • Handle: RePEc:pal:jorsoc:v:52:y:2001:i:7:d:10.1057_palgrave.jors.2601162
    DOI: 10.1057/palgrave.jors.2601162
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    Citations

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    Cited by:

    1. Ananth V. Iyer & Apurva Jain, 2003. "The Logistics Impact of a Mixture of Order-Streams in a Manufacturer-Retailer System," Management Science, INFORMS, vol. 49(7), pages 890-906, July.
    2. Dudek, Gregor & Stadtler, Hartmut, 2005. "Negotiation-based collaborative planning between supply chains partners," European Journal of Operational Research, Elsevier, vol. 163(3), pages 668-687, June.
    3. Slikker, Marco & Fransoo, Jan & Wouters, Marc, 2005. "Cooperation between multiple news-vendors with transshipments," European Journal of Operational Research, Elsevier, vol. 167(2), pages 370-380, December.
    4. Gansterer, Margaretha & Födermayr, Patrick & Hartl, Richard F., 2021. "The capacitated multi-level lot-sizing problem with distributed agents," International Journal of Production Economics, Elsevier, vol. 235(C).
    5. Xu, Kefeng & Leung, Mark T., 2009. "Stocking policy in a two-party vendor managed channel with space restrictions," International Journal of Production Economics, Elsevier, vol. 117(2), pages 271-285, February.
    6. Bauso, Dario & Giarré, Laura & Pesenti, Raffaele, 2009. "Distributed consensus in noncooperative inventory games," European Journal of Operational Research, Elsevier, vol. 192(3), pages 866-878, February.

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