An Analysis of Two Two-Echelon Inventory Systems.
Abstract
This paper analyzes the probabilistic behavior of a two-echelon inventory system. In this system primary demands occur at one of the lower echelon locations called bases. Bases are resupplied only by the upper echelon called the depot; the depot is resupplied by an external supplier. All demands occuring when a base or depot is out of stock are backordered. First the probability distribution is developed for the number of backorders outstanding at a point in time when the bases follow continuous review (Q,r) policies and the depot follows a periodic review order-up-to-S policy. Next the expected number of backorders outstanding at each point in time for two systems is compared. In the first system, bases follow a continuous review (s-1,s) policy and the depot follows a periodic review order-up-to-S policy; in the second system, all locations follow a continuous review (s-1,s) policy. Differences in the performance for the two system,s are illustrated using Air Force data. Lastly the probability distribution is derived for the number of backorders outstanding at a particular point in time at the bases when all locations follow a periodic review order-up-to-s policy.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1977
- Accession Number
- ADA050184
Entities
People
- John A. Muckstadt
- Paul Sasseville
Organizations
- Cornell University College of Engineering