Heuristics for Handling Direct Upstream Demand in Two-Echelon Distribution Inventory Systems
Author
Summary, in English
This paper considers a two-echelon distribution inventory system with a central warehouse and a number of retailers. There is direct customer demand also at the warehouse. If this upstream demand requires a high service, it may be advantageous to give higher priority to customer orders compared to retailer replenishments. We suggest and evaluate techniques for handling this situation. One technique means that we have an extra separate stock point for the direct customer demand at the warehouse. Another technique means that we apply a so-called critical level policy at the warehouse, i.e., if the stock on hand at the warehouse is less than or equal to the critical level, retailer replenishments are backordered.
Department/s
Publishing year
2007
Language
English
Pages
266-270
Publication/Series
International Journal of Production Economics
Volume
108
Issue
1-2
Document type
Journal article
Publisher
Elsevier
Topic
- Transport Systems and Logistics
- Probability Theory and Statistics
Keywords
- Stochastic
- Upstream customer demand
- Inventory management
- Two level
Status
Published
ISBN/ISSN/Other
- ISSN: 0925-5273