A Single-Unit Decomposition Approach to Multiechelon Inventory Systems

Power-of-two policies for single-warehouse multi-retailer inventory systems with order frequency discounts

– All-unit order frequency discount • 94%-effective policy for a variable base period – Incremental order frequency discount • 94%-effective policy for a fixed base period • 98%-effective policy for a variable base period Introduction • A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products t...

A Single-Unit Decomposition Approach to Multi-Echelon Inventory

We show the optimality of state dependent echelon base stock policies in uncapacitated serial inventory systems with Markov modulated demand and Markov modulated stochastic leadtimes in the absence of order crossing. Our results cover finite time horizon problems as well as infinite time horizon formulations, with either a discounted or an average cost criterion. We employ a novel approach, bas...

Optimal Replenishment Policies for Multiechelon Inventory Problems Under Advance Demand Information

Customers and downstream supply chain partners often place, or can be induced to place, orders in advance of future requirements. We show how to optimally incorporate advance demand information into periodic-review, multiechelon, inventory systems in series. While the state space for series systems appears to be formidably large, we decompose the problem across locations, as in Clark and Scarf ...

Electronic Companion — “ A Single - Unit Decomposition Approach to Multi - Echelon Inventory Systems ” by Alp Muharremoglu and

Optimal Policy for a Multiechelon Inventory System with Remanufacturing

We analyze a multi-echelon inventory system with inventory stages arranged in series. In addition to traditional forward material flows, used products are returned to a recovery facility, where they can be stored, disposed, or remanufactured and shipped to one of the stages to reenter the forward flow of material. This system combines the key elements of two simpler systems: the series system s...