A Stochastic Optimization Model for a Multi-Echelon Inventory System with Direct Demand that Consists of Two Commodities
Keywords:
Multi-echelon system, Two-commodity, Continuous review, Optimization
Abstract
In this paper, we present a stochastic optimization model for a multi-echelon inventory system with directdemand, handling two interrelated commodities. The system consists of a three-level continuous review inventory model,comprising a warehouse (WH), a single distribution center (DC), and a retailer (R). A (s; S) inventory policy is implemented,assuming Poisson demand and exponentially distributed lead times at the retail node. The DC replenishes retailers in fixedpack sizes Qi(= Si - si), while the WH provides an abundant supply. We derive the steady-state probability distributionand key performance measures, offering insights into system efficiency and operational characteristics
Published
2025-12-08
How to Cite
K, P., C, V., & R, B. (2025). A Stochastic Optimization Model for a Multi-Echelon Inventory System with Direct Demand that Consists of Two Commodities. Statistics, Optimization & Information Computing. https://doi.org/10.19139/soic-2310-5070-2969
Issue
Section
Research Articles
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