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In this paper, we propose a continuous time model for a multi-echeloninventory system. Items in the inventory are deteriorating. Lateraltransshipment are allowed among the warehouses in the same echelon wheretransshipment rate depends on the inventory level of the correspondingwarehouses. We give some sufficient conditions for the equilibrium points ofthe system to be stable. By aggregating the warehouses in an echelon, a fastprocedure is developed for finding the equilibrium values of inventory level ateach warehouse.

A continuous time multi-echelon inventory model for deteriorating items with transshipment