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A queuing approach for inventory planning with batch ordering in multi-echelon supply chains


  • Sandeep Jain


  • N. Raghavan



This paper presents stylized models for conducting performance analysis of the manufacturing supply chain network (SCN) in a stochastic setting for batch ordering. We use queueing models to capture the behavior of SCN. The analysis is clubbed with an inventory optimization model, which can be used for designing inventory policies . In the first case, we model one manufacturer with one warehouse, which supplies to various retailers. We determine the optimal inventory level at the warehouse that minimizes total expected cost of carrying inventory, back order cost associated with serving orders in the backlog queue, and ordering cost. In the second model we impose service level constraint in terms of fill rate (probability an order is filled from stock at warehouse), assuming that customers do not balk from the system. We present several numerical examples to illustrate the model and to illustrate its various features. In the third case, we extend the model to a three-echelon inventory model which explicitly considers the logistics process. Copyright Springer-Verlag 2009

Suggested Citation

  • Sandeep Jain & N. Raghavan, 2009. "A queuing approach for inventory planning with batch ordering in multi-echelon supply chains," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 17(1), pages 95-110, March.
  • Handle: RePEc:spr:cejnor:v:17:y:2009:i:1:p:95-110
    DOI: 10.1007/s10100-008-0077-8

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    References listed on IDEAS

    1. Kim, Ilhyung & Tang, Christopher S., 1997. "Lead time and response time in a pull production control system," European Journal of Operational Research, Elsevier, vol. 101(3), pages 474-485, September.
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