Note—Replenishment Sequencing in a Supply Chain with Balanced Ordering

Manufacturing & Service Operations Management · 2008 · Volume 10 · Issue 2

Abstract

This paper studies a supply chain with one supplier and multiple heterogeneous retailers where base-stock policies are practiced. The supplier's performance, in terms of optimal cost, optimal stocking level, and implied service level, is investigated under different retailer replenishment sequences. We show that under many realistic demand distributions, it is optimal to sequence retailers according to ascending variability. Furthermore, if the retailers vary in magnitudes of their orders, then the optimal sequence is usually the one with descending magnitudes.

Keywords

inventory, two echelons, operating characteristics, stochastic models, stochastic comparisons, sequencing

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