A simple heuristic for echelon (r,nQ, T) policies in serial supply chains

Authors:
Kevin H. Shang;Sean X. Zhou
Affiliations:
Fuqua School of Business, Duke University, Durham, North Carolina 27708, USA and Systems Engineering & Engineering Management, Chinese University of Hong Kong, Shatin, N.T., Hong Kong;Fuqua School of Business, Duke University, Durham, North Carolina 27708, USA and Systems Engineering & Engineering Management, Chinese University of Hong Kong, Shatin, N.T., Hong Kong
Venue:
Operations Research Letters
Year:
2009

Citing 7
Cited 3

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Note: A Simple Heuristic for Serial Inventory Systems with Fixed Order Costs

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Optimal Policy for a Multiechelon Inventory System with Batch Ordering and Fixed Replenishment Intervals

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Optimal and Heuristic Echelon (r, nQ, T) Policies in Serial Inventory Systems with Fixed Costs

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Optimal (r,nQ,T) batch ordering with quantized supplies

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Joint shipment consolidation and inventory decisions in a two-stage distribution system

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Effect of modeling fixed cost in a serial inventory system with periodic review

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Abstract

This paper proposes a simple heuristic that generates a solution for echelon (r,nQ,T) policies by sequentially solving a deterministic demand problem, a subproblem with fixed reorder intervals, and a subproblem with fixed batch sizes. For each of these problems, we further simplify the computation by solving a series of single-stage systems whose parameters are obtained directly from the original problem data. In a numerical study, we find that this heuristic outperforms an existing one in the literature.