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Approximate evaluation of batch‐ordering policies for a one‐warehouse, N non‐identical retailer system under compound poisson demand
Author(s) -
Axsäter Sven
Publication year - 1995
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 - 10.1002/1520-6750(199508)42:5<807::aid-nav3220420507>3.0.co;2-p
Subject(s) - warehouse , reorder point , economic shortage , economic order quantity , poisson distribution , computer science , stock (firearms) , operations research , lost sales , safety stock , mathematical optimization , operations management , business , mathematics , economics , supply chain , marketing , statistics , engineering , mechanical engineering , linguistics , philosophy , government (linguistics)
Considered is a two‐level inventory system with one central warehouse and N retailers facing different independent compound Poisson demand processes. The retailers replenish from the warehouse and the warehouse from an outside supplier. All facilities apply continuous review installation stock ( R , Q ) policies with different reorder points and batch quantities. Presented is a new approximate method for evaluation of holding and shortage costs, which can be used to select optimal policies. The accuracy of the approximation is evaluated by comparison with exact and simulated results. © 1995 John Wiley & Sons, Inc.