Clark and Scarf [1960] characterize optimal policies in a two-echelon, twolocation inventory model. We extend their result to the infinite-horizon case (for both discounted and average costs). The computations required are far easier than for the finite horizon problem. Further simplification is achieved for normal demands. We also consider the more interesting case of multiple locations at the...

in this paper, we develop an inventory model for perishable items with random lifetime in a two-echelon production-distribution system. there is a manufacturer at the first stage that produces its product with a constant rate. deterioration in this stage is modeled via a two-parameter weibull distribution. at the second stage, the retailer places the order and receives the product instantly. th...

We study a two echelon supply chain with AR(1) demand and unit replenishment lead-times. Each echelon of the supply chain uses conditional expectation to generate MMSE forecasts. Both echelons use these forecasts inside the “Order-Up-To” policy to generate replenishment orders. We investigate 3 different scenarios: The first is when each echelon aims to minimize their own inventory holding and ...

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...

We consider a multi-product serial two echelon inventory system with stochastic demand. Inventories at the downstream location are replenished periodically using an automatic ordering system. Under vendor managed inventory strategies the upstream stage is allowed to adapt these orders in order to benefit from economies of scale. We propose three different VMI strategies, aiming to reduce the or...

We consider the classic N -stage serial supply systems with linear costs and stationary random demands. There are deterministic transportation leadtimes between stages, and unsatisfied demands are backlogged. The optimal inventory policy for this system is known to be an echelon base-stock policy, which can be computed through minimizing N nested convex functions recursively. To identify the ke...

in this paper, a supplier-retailer transportation system is investigated as a two-echelon environment. there is a single location in each echelon; the unique supplier at the first echelon has to replenish the retailer's warehouse at the second echelon. by the way, the shortage situation should be avoided. for this situation, a model is provided based on the traditional eoq model. the inven...

Multi-echelon transaction is a common situation in the supply chain nowadays. This research is to formulate a three-echelon integrated inventory model under defective products, reworking and credit period consideration. An algorithm and numerical analysis are used to observe the effect of defective rate and credit period time to the inventory policy and total profit.

Most research on supply chain management deals with settings where firms do not voluntarily get rid of inventory in the system. Since voluntary inventory reductions are often observed in practice, in this paper, we propose a (multi-echelon) model where the firm can dispose of excess stock through sales in the secondary market at each stage in the supply chain. What are called nested echelon bas...