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Stock Allocation in a Two-Echelon Distribution System Or "What to Do Until Your Ship Comes In"

Author

Listed:
  • Peter L. Jackson

    (School of Operations Research and Industrial Engineering, College of Engineering, Cornell University, Ithaca, New York 14853)

Abstract

In this paper, we focus on a single order cycle of a warehouse, serving N retailers where the only shipments allowed during the cycle are from the warehouse to the retailers. For a simple ship-up-to-S allocation policy, we develop both the exact cost model and a computationally tractable approximate cost model for the case of identical retailers, and demonstrate empirically the benefits of centralizing at least a portion of the total system stock.

Suggested Citation

  • Peter L. Jackson, 1988. "Stock Allocation in a Two-Echelon Distribution System Or "What to Do Until Your Ship Comes In"," Management Science, INFORMS, vol. 34(7), pages 880-895, July.
    • Handle: RePEc:inm:ormnsc:v:34:y:1988:i:7:p:880-895
    DOI: 10.1287/mnsc.34.7.880
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