Periodic-Review Policy for a 2-Echelon Inventory Problem with Seasonal Demand

Abstract

This paper studies a two-level inventory system with one warehouse and retailers under seasonal demand. All locations apply periodic review base-stock policy with echelon stock concept. The objective is to determine an inventory policy with the minimum inventory cost respected to required service level. Three ways to determine inventory policies are proposed which are upper, lower and EOQ alternatives. Among these alternatives, it is found that upper-alternative policies tend to give the lowest cost which is around 17% lower than other policies. EOQ-alternative policies give the lowest cost in some instances with zero ordering cost. However, lower-alternative policies lead to the lower demand loss, its highest average loss in one instance is 0.07% while other policies' loss can be as high as 0.22%.

Optimizing Inventory Replenishment for Seasonal Demand with Discrete Delivery Times

“…DP Model was used to find the results in Table 2. The table shows that there should be 18 lots during the year in weeks 3,6,9,12,15,18,21,23,25,27,29,31,33,36,39,42,45,48. The initial inventory is enough to cover the demand for the first two weeks.…”

“…However, they neglected the effect of lead time. Sakulsom and Tharmmaphornphilas [3] investigated the periodic-review policy with seasonal demand, with known lead time, where there is one warehouse and N retailers. DE and Mahata [47] investigated an EOQ model under monsoon type fuzzy demand rate where cycle time is a decision variable, without any consideration for lead time, and shortages are not allowed.…”

“…Therefore, delivery time was traditionally considered a continuous variable. Some of the limitations were on the design of the supply chain network [3].…”

Modelos logísticos estocásticos: una revisión de la literatura

“…El GSM supera el SSM en más del 80% de los casos simulados y una mejora del costo total promedio en el 10%, mejora el costo con diferencia relativamente baja entre los dos enfoques. En [39] comparan tres políticas de inventario bajo una demanda estacional en una CS con dos eslabones, un almacén y N minoristas. El modelo lo soluciona con una metodología de dos fases, en la primera con demanda determinista y la segunda estocástica, la resuelve con múltiples escenarios.…”