IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v114y2008i1p119-133.html
   My bibliography  Save this article

Inventory/distribution control system in a one-warehouse/multi-retailer supply chain

Author

Listed:
  • Monthatipkul, Chumpol
  • Yenradee, Pisal

Abstract

This paper proposes a new inventory control system called the inventory/distribution plan (IDP) control system for a one-warehouse/multi-retailer supply chain. In the IDP control system, a proposed mixed-integer linear programming model is solved to determine an optimal IDP that controls the inventories of the supply chain. The efficiency of the IDP control system is compared to that of the echelon-stock R,s,S control policy, where R is a periodic review interval, s is a reorder point, and S is an order-up-to level, at various fill rates. The experimental results show that when the system faces non-stationary demands, the IDP control system significantly outperforms the echelon-stock R,s,S control system because it can give lower total costs for all ranges of fill rates.

Suggested Citation

  • Monthatipkul, Chumpol & Yenradee, Pisal, 2008. "Inventory/distribution control system in a one-warehouse/multi-retailer supply chain," International Journal of Production Economics, Elsevier, vol. 114(1), pages 119-133, July.
    • Handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:119-133
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(08)00007-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leroy B. Schwarz & Bryan L. Deuermeyer & Ralph D. Badinelli, 1985. "Fill-Rate Optimization in a One-Warehouse N-Identical Retailer Distribution System," Management Science, INFORMS, vol. 31(4), pages 488-498, April.
    2. Axsater, Sven & Rosling, Kaj, 1994. "Multi-level production-inventory control: Material requirements planning or reorder point policies?," European Journal of Operational Research, Elsevier, vol. 75(2), pages 405-412, June.
    3. Xie, Ying & Petrovic, Dobrila & Burnham, Keith, 2006. "A heuristic procedure for the two-level control of serial supply chains under fuzzy customer demand," International Journal of Production Economics, Elsevier, vol. 102(1), pages 37-50, July.
    4. Axsater, Sven, 2003. "Approximate optimization of a two-level distribution inventory system," International Journal of Production Economics, Elsevier, vol. 81(1), pages 545-553, January.
    5. Giannoccaro, Ilaria & Pontrandolfo, Pierpaolo, 2002. "Inventory management in supply chains: a reinforcement learning approach," International Journal of Production Economics, Elsevier, vol. 78(2), pages 153-161, July.
    6. Whybark, D. Clay & Yang, Shitao, 1996. "Positioning inventory in distribution systems," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 271-278, August.
    7. Tagaras, George, 1999. "Pooling in multi-location periodic inventory distribution systems," Omega, Elsevier, vol. 27(1), pages 39-59, February.
    8. Al-Rifai, Mohammad H. & Rossetti, Manuel D., 2007. "An efficient heuristic optimization algorithm for a two-echelon (R, Q) inventory system," International Journal of Production Economics, Elsevier, vol. 109(1-2), pages 195-213, September.
    9. Seifbarghy, Mehdi & Jokar, Mohammad Reza Akbari, 2006. "Cost evaluation of a two-echelon inventory system with lost sales and approximately Poisson demand," International Journal of Production Economics, Elsevier, vol. 102(2), pages 244-254, August.
    10. Ganeshan, Ram & Boone, Tonya & Stenger, Alan J., 2001. "The impact of inventory and flow planning parameters on supply chain performance: An exploratory study," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 111-118, May.
    11. Schneider, Helmut & Rinks, Dan B., 1991. "Empirical study of a new procedure for allocating safety stock in a wholesale inventory system," International Journal of Production Economics, Elsevier, vol. 24(1-2), pages 181-189, November.
    12. Wang, Wei & Fung, Richard Y. K. & Chai, Yueting, 2004. "Approach of just-in-time distribution requirements planning for supply chain management," International Journal of Production Economics, Elsevier, vol. 91(2), pages 101-107, September.
    13. van der Heijden, Matthieu, 2000. "Near cost-optimal inventory control policies for divergent networks under fill rate constraints," International Journal of Production Economics, Elsevier, vol. 63(2), pages 161-179, January.
    14. Abdul-Jalbar, B. & Gutierrez, J. & Puerto, J. & Sicilia, J., 2003. "Policies for inventory/distribution systems: The effect of centralization vs. decentralization," International Journal of Production Economics, Elsevier, vol. 81(1), pages 281-293, January.
    15. Ganeshan, Ram, 1999. "Managing supply chain inventories: A multiple retailer, one warehouse, multiple supplier model," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 341-354, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yaqing Xu & Jiang Zhang & Zihao Chen & Yihua Wei, 2021. "Single-Manufacturer Multi-Retailer Supply Chain Models with Discrete Stochastic Demand," Sustainability, MDPI, vol. 13(15), pages 1-13, July.
    2. Manzini, Riccardo, 2012. "A top-down approach and a decision support system for the design and management of logistic networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(6), pages 1185-1204.
    3. Berling, Peter & Farvid, Mojtaba, 2014. "Lead-time investigation and estimation in divergent supply chains," International Journal of Production Economics, Elsevier, vol. 157(C), pages 177-189.
    4. Visentin, Andrea & Prestwich, Steven & Rossi, Roberto & Tarim, S. Armagan, 2021. "Computing optimal (R,s,S) policy parameters by a hybrid of branch-and-bound and stochastic dynamic programming," European Journal of Operational Research, Elsevier, vol. 294(1), pages 91-99.
    5. Adam Marcysiak, 2020. "The scope of diversification of the warehouse space market in a regional configuration," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(1), pages 10-23, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    2. Noordhoek, Marije & Dullaert, Wout & Lai, David S.W. & de Leeuw, Sander, 2018. "A simulation–optimization approach for a service-constrained multi-echelon distribution network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 292-311.
    3. Dai, Bo & Chen, Haoxun & Li, Yuan & Zhang, Yidong & Wang, Xiaoqing & Deng, Yuming, 2023. "An alternating direction method of multipliers for optimizing (s, S) policies in a distribution system with joint replenishment volume constraints," Omega, Elsevier, vol. 116(C).
    4. Guo, Cong & Li, Xueping, 2014. "A multi-echelon inventory system with supplier selection and order allocation under stochastic demand," International Journal of Production Economics, Elsevier, vol. 151(C), pages 37-47.
    5. Lee, Dong Joo & Jeong, In-Jae, 2010. "A distributed coordination for a single warehouse-multiple retailer problem under private information," International Journal of Production Economics, Elsevier, vol. 125(1), pages 190-199, May.
    6. Carvajal, Jimmy & Castaño, Fabian & Sarache, William & Costa, Yasel, 2020. "Heuristic approaches for a two-echelon constrained joint replenishment and delivery problem," International Journal of Production Economics, Elsevier, vol. 220(C).
    7. Ying Xie & Dobrila Petrovic, 2006. "Fuzzy‐logic‐based decision‐making system for stock allocation in a distribution supply chain," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 14(1‐2), pages 27-42, January.
    8. Haji, Rasoul & Neghab, Mohammadali Pirayesh & Baboli, Armand, 2009. "Introducing a new ordering policy in a two-echelon inventory system with Poisson demand," International Journal of Production Economics, Elsevier, vol. 117(1), pages 212-218, January.
    9. Whybark, D. Clay & Yang, Shitao, 1996. "Positioning inventory in distribution systems," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 271-278, August.
    10. Ozdemir, Deniz & Yucesan, Enver & Herer, Yale T., 2006. "Multi-location transshipment problem with capacitated transportation," European Journal of Operational Research, Elsevier, vol. 175(1), pages 602-621, November.
    11. Visentin, Andrea & Prestwich, Steven & Rossi, Roberto & Tarim, S. Armagan, 2021. "Computing optimal (R,s,S) policy parameters by a hybrid of branch-and-bound and stochastic dynamic programming," European Journal of Operational Research, Elsevier, vol. 294(1), pages 91-99.
    12. Jung, Jung Woo & Lee, Young Hae, 2010. "Heuristic algorithms for production and transportation planning through synchronization of a serial supply chain," International Journal of Production Economics, Elsevier, vol. 124(2), pages 433-447, April.
    13. Bo Dai & Fenfen Li, 2021. "Joint Inventory Replenishment Planning of an E-Commerce Distribution System with Distribution Centers at Producers’ Locations," Logistics, MDPI, vol. 5(3), pages 1-14, July.
    14. Steffen T. Klosterhalfen & Stefan Minner & Sean P. Willems, 2014. "Strategic Safety Stock Placement in Supply Networks with Static Dual Supply," Manufacturing & Service Operations Management, INFORMS, vol. 16(2), pages 204-219, May.
    15. Özdemir, Deniz & Yücesan, Enver & Herer, Yale T., 2013. "Multi-location transshipment problem with capacitated production," European Journal of Operational Research, Elsevier, vol. 226(3), pages 425-435.
    16. Fotuhi, Fateme & Huynh, Nathan & Vidal, Jose M. & Xie, Yuanchang, 2013. "Modeling yard crane operators as reinforcement learning agents," Research in Transportation Economics, Elsevier, vol. 42(1), pages 3-12.
    17. Lee, Young Hae & Jung, Jung Woo & Jeon, Young Sang, 2007. "An effective lateral transshipment policy to improve service level in the supply chain," International Journal of Production Economics, Elsevier, vol. 106(1), pages 115-126, March.
    18. Frank Schneider & Ulrich W. Thonemann & Diego Klabjan, 2018. "Optimization of Battery Charging and Purchasing at Electric Vehicle Battery Swap Stations," Transportation Science, INFORMS, vol. 52(5), pages 1211-1234, October.
    19. Fleisch, Elgar & Tellkamp, Christian, 2005. "Inventory inaccuracy and supply chain performance: a simulation study of a retail supply chain," International Journal of Production Economics, Elsevier, vol. 95(3), pages 373-385, March.
    20. van Houtum, G. J. & Inderfurth, K. & Zijm, W. H. M., 1996. "Materials coordination in stochastic multi-echelon systems," European Journal of Operational Research, Elsevier, vol. 95(1), pages 1-23, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:119-133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.