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Evaluation of base‐stock policies in multiechelon inventory systems with compound‐poisson demands

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  • Paul Zipkin

Abstract

This article analyzes a model of a multiechelon inventory system: The exogenous demands form independent compound‐Poisson processes. Each location follows a base‐stock policy. The transit times between locations may be stochastic. Instead of assuming independent transit times, we follow an approach closer to the standard treatment of single‐location models. We develop procedures to compute steady‐state performance measures, including average backorders and average inventories. The model and the analysis generalize those of Svoronos and Zipkin, who treat the case of pure Poisson demands.

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  • Paul Zipkin, 1991. "Evaluation of base‐stock policies in multiechelon inventory systems with compound‐poisson demands," Naval Research Logistics (NRL), John Wiley & Sons, vol. 38(3), pages 397-412, June.
    • Handle: RePEc:wly:navres:v:38:y:1991:i:3:p:397-412
    DOI: 10.1002/1520-6750(199106)38:33.0.CO;2-3
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    References listed on IDEAS

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    1. R. M. Simon, 1971. "Stationary Properties of a Two-Echelon Inventory Model for Low Demand Items," Operations Research, INFORMS, vol. 19(3), pages 761-773, June.
    2. Kripa Shanker, 1981. "Exact analysis of a two‐echelon inventory system for recoverable items under batch inspection policy," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 28(4), pages 579-601, December.
    3. Bruce L. Miller, 1974. "Dispatching from Depot Repair in a Recoverable Item Inventory System: On the Optimality of a Heuristic Rule," Management Science, INFORMS, vol. 21(3), pages 316-325, November.
    4. Paul Zipkin, 1986. "Stochastic leadtimes in continuous‐time inventory models," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 33(4), pages 763-774, November.
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    1. F R Johnston & E A Shale & S Kapoor & R True & A Sheth, 2011. "Breadth of range and depth of stock: forecasting and inventory management at Euro Car Parts Ltd," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(3), pages 433-441, March.
    2. Kouki, Chaaben & Babai, M. Zied & Jemai, Zied & Minner, Stefan, 2019. "Solution procedures for lost sales base-stock inventory systems with compound Poisson demand," International Journal of Production Economics, Elsevier, vol. 209(C), pages 172-182.

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