Three Generic Methods for Evaluating Stochastic Multi-Echelon Inventory Systems

Globalization, product proliferation and fast product innovation have significantly increased the complexities of supply chains in many industries. One of the most important advancements of supply chain management in recent years is the development of models and methodologies for controlling inventory in general supply networks under uncertainty, and their wide-spread applications to industry. These developments are based on three generic methods: the queueinginventory method, the lead-time demand method and the flow-unit method. In this paper, we compare and contrast these methods by discussing their differences and connections, and showing how to apply them systematically to characterize and evaluate various network topologies with different supply processes, inventory policies and demand processes. Our objective is to forge links among research strands on various network topologies and to develop unified methodologies.