MULTIECHELON VS SINGLE-ECHELON INVENTORY CONTROL POLICIES FOR LOW-DEMAND ITEMS


HAUSMAN W., ERKIP N.

MANAGEMENT SCIENCE, cilt.40, ss.597-602, 1994 (SSCI İndekslerine Giren Dergi)

  • Cilt numarası: 40 Konu: 5
  • Basım Tarihi: 1994
  • Doi Numarası: 10.1287/mnsc.40.5.597
  • Dergi Adı: MANAGEMENT SCIENCE
  • Sayfa Sayısı: ss.597-602

Özet

Multi-echelon inventory systems are often controlled as a network of single-echelon inventory systems for simplicity of managerial authority, organizational control, and performance monitoring. This paper explores the amount of suboptimization in such a situation, using an actual demand data set provided by other researchers. We consider low-demand, high-cost items controlled on an (S - 1, S) basis, with all warehouse stockouts met on an emergency-ordering basis. We demonstrate that the suboptimality penalty for this data set is 3% to 5% when single-echelon systems are appropriately parameterized.