Title: Stochastic leadtimes in a one-warehouse, N-retailer inventory system with the warehouse actually carrying stock

Authors: Adriano O. Solis, Charles P. Schmidt

Addresses: School of Administrative Studies, York University, Toronto, Ontario M3J 1P3, Canada. ' Department of Information Systems, Statistics and Management Science, The University of Alabama, Tuscaloosa, Alabama 35487, USA

Abstract: We previously investigated, analytically, effects of introducing stochastic leadtimes between the warehouse and retail sites in a multi-echelon model with deterministic leadtimes when the warehouse does not carry stock. In the current study, the warehouse does carry stock, making the model mathematically intractable. A heuristic involving simulation experiments is devised, taking off from deterministic leadtime model solutions. The resulting average system inventory is equal or very close to the optimal level. Our study suggests that the optimal solution to the deterministic leadtime case provides an appropriate starting point in searching, using simulation, for a solution in the stochastic leadtime case.

Keywords: inventory management; multi-echelon inventory systems; stochastic lead times; simulation.

DOI: 10.1504/IJSPM.2009.032596

International Journal of Simulation and Process Modelling, 2009 Vol.5 No.4, pp.337 - 347

Received: 01 Nov 2008
Accepted: 29 Jun 2009
Published online: 08 Apr 2010 *

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