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Heuristic Coordination of Decentralized Inventory Systems Using Induced Backorder Costs

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Author

Summary, in English

In this paper, we investigate a one-warehouse multiple-retailer system, where the inventory control decisions are coordinated using a near optimal induced backorder cost, β*. All installations use continuous review installation-stock (R, Q) policies. The analysis builds on an approximation model where the stochastic warehouse delays are replaced by their correct averages. The contributions include insights as to how β* is influenced by system parameters, and the determination of simple closed form β* estimates. The latter offering a practical means to achieve coordinated control of large size systems.

Publishing year

2006

Language

English

Pages

294-310

Publication/Series

Production and Operations Management

Volume

15

Issue

2

Document type

Journal article

Publisher

Wiley-Blackwell

Topic

  • Transport Systems and Logistics

Keywords

  • Inventory control
  • Coordination
  • Studies
  • Heuristic
  • Supply chains

Status

Published

ISBN/ISSN/Other

  • ISSN: 1059-1478