Technical Note---Capacitated Serial Inventory Systems: Sample Path and Stability Properties Under Base-Stock Policies

Authors:
Woonghee Tim Huh;Ganesh Janakiraman;Mahesh Nagarajan
Affiliations:
Operations and Logistics Division, Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada;School of Management, The University of Texas at Dallas, Richardson, Texas 75080-3021;Operations and Logistics Division, Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada
Venue:
Operations Research
Year:
2010

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Abstract

We study a periodically reviewed multiechelon serial inventory system with a capacity constraint on the order quantity at every stage. Under echelon base-stock policies, we demonstrate a simple sample-path result that maps the echelon shortfalls in the serial system to the shortfalls of suitably defined single-stage systems. Because the shortfall processes of single-stage systems are well understood, our result allows us to reinterpret results in the literature on the stability and regeneration times of such multiechelon systems in a simpler fashion with weaker assumptions.