Policy and cost approximations of two-echelon distribution systems with a procurement cost at the higher echelon

2006 International Conference on Service Systems and Service Management

2006

This paper considers a two-level supply chain consisting of one warehouse and one retailer. Unlike the most similar models which determine the optimal ordering policy according to inventory cost only, in this model, we also consider the transportation cost. We assume that the demand rate at the retailer is known and the demand is confined to a single item. Shortages are allowed neither at the retailer nor at the warehouse. The objective is to find the economic order quantities for both the retailer and the warehouse which minimize the total cost. That is, the sum of the holding and ordering cost at the retailer and warehouse as well as the transportation cost from warehouse to retailer. Numerical results show savings can be made by this model in comparison to the model of optimal ordering policy in which the transportation cost is not considered.

Section: -Transportation Schemementioning

confidence: 99%

Section: -Introductionmentioning

confidence: 99%

Economic Order Quantity in a Centralized Two-Level Supply Chain with Transportation Cost

Baboli

Neghab

2006 International Conference on Service Systems and Service Management

2006

“…Then, he (1993) formulates his previous model by applying (r, Q) policy for each echelon. Matta and Sinha (1995) investigate a two-echelon inventory system consisting of a central warehouse and a number of retailers. Each retailer applies (T, S) inventory policy with an identical review interval T and different maximum inventory level S. the central warehouse applies (T, s, S) policy, where T is the same review interval as that of retailers; s is its reorder points, and S is its desired maximum inventory level.…”

Section: Introductionmentioning

confidence: 99%

One-for-one period policy and a series of suppliers

Neghab

2009 International Conference on Computers &Amp; Industrial Engineering

2009

The purpose of this paper is to adopt and analyze a new ordering policy called one-for-one-period policy in a multi-echelon supply chain consisting of one retailer and a series of N suppliers. The main advantage of adopting the one-for-one-period (/,7) ordering policy for retailers is the elimination of uncertainty for supplier which leads to total elimination of the safety stocks at all suppliers. This in tum leads to the reduction of the total system costs and in case any supplier's ordering cost is negligible it can even eliminate the need for him to carry any inventory. In addition to this advantage, the numerical results show that the application of this new policy for the retailer leads to the further advantage of outperforming the one-for-one (S-1,S) policy in terms of total multi-echelon system cost under specified conditions. We derive the minimum total cost for this multi-echelon system and provide a numerical example to shed light on the merits of the proposed model compared to the common practice as reported in the literature.

International Journal of Physical Distribution &Amp; Logistics Management

“…The model assumed identical suppliers and retailers for simplicity. Matta and Sinha (1995) investigated a two-echelon system, which included a warehouse, a system of suppliers, and a set of downstream retailers. The model considered the ordering costs only at the warehouses, not at the retailers.…”

mentioning

confidence: 99%

A comparative study of three different SCM approaches

Sundaram

Mehta²

2002

A comparative study of three different approaches on a hypothetical supply chain model is presented. The three approaches investigated are: independent; semi-integrated; and integrated. In the independent approach, it is assumed that decisions are made independently at three different levels. Decisions are assumed to be made at two different levels in the semi-integrated approach. In the integrated approach, all decisions are assumed to be made at a single level.