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Evaluation of base‐stock policies in multiechelon inventory systems with state‐dependent demands. Part II: State‐dependent depot policies
Author(s) -
Song JingSheng,
Zipkin Paul H.
Publication year - 1996
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/(sici)1520-6750(199604)43:3<381::aid-nav5>3.0.co;2-5
Subject(s) - stock (firearms) , markov chain , operations research , computer science , lost sales , markov process , warehouse , stockout , depot , mathematical optimization , business , mathematics , statistics , marketing , engineering , mechanical engineering , archaeology , machine learning , history
We consider a two‐echelon inventory system where the exogenous demands occur only at the retailer locations, and the demand rates are functions of an underlying continuous‐time Markov chain. This underlying process may represent, for example, general economic conditions, the number of active users in the system, et cetera. Each retailer location follows a base‐stock policy that is independent of the process. However, the warehouse (central depot) follows a state‐dependent base‐stock policy. We develop a procedure to compute the exact steady‐state customer‐delay distribution for both the warehouse and the retailer locations. © 1996 John Wiley & Sons, Inc.