A one-warehouse/multi-retailer inventory system with lost sales, Erlangian lead times, and emergency shipments Online publication date: Mon, 20-May-2019
by Hamed Tayebi
International Journal of Logistics Systems and Management (IJLSM), Vol. 33, No. 1, 2019
Abstract: We consider a two-echelon inventory system with one central warehouse and a number of retailers. In case of a stock-out at the warehouse, the external supplier replenishes retailers' stocks by emergency shipments. The warehouse and retailers apply a base-stock ordering policy and unsatisfied demands at retailers will be lost. We assume that lead times of retailers are Erlangian distributed. Under the realistic assumption that the replenishment orders do not cross in time, the Erlangian lead times become stochastically dependent. This dependency will affect the optimal base-stock levels at retailers and, consequently, the optimal base-stock level at the warehouse. In this paper, we estimate the demand rate at the warehouse, and calculate the total cost function of the inventory system. We also present an algorithm to compute the optimal base-stock levels at the warehouse and retailers. Our numerical study illustrates that the sequential supply system cannot be ignored.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Logistics Systems and Management (IJLSM):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook