Exact Analysis of Continuous Review (R,Q) Policies in Two-Echelon Inventory Systems with Compound Poisson Demand

Operations Research · 2000 · Volume 48 · Issue 5

Abstract

We consider a two-level inventory system with one central warehouse and N retailers. All installations apply different continuous review installation stock ( R,Q ) policies. The retailers face independent compound Poisson demand processes. Transportation times are constant. We present a method for exact evaluation of control policies that provides the complete probability distributions of the retailer inventory levels.

Keywords

Inventory/production, multi-echelon: batch-ordering policies, continuous review, Inventory/production, stochastic: compound Poisson demand

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