Some studies in the multi-echelon inventory systems literature have used a negative binomial distribution to approximate a critical random variable arising in the model. Graves (1996) developed a multi-echelon inventory model with fixed replenishment intervals, where each site follows a base stock policy. He proposed in the one-warehouse, N-retailer case a negative binomial distribution to approximate a random variable he referred to as 'uncovered demand'. Computational evidence was provided to demonstrate the effectiveness of the approximation. Graves then suggested search procedures for approximately optimal base stock levels at the warehouse and N identical retailers under two customer service criteria: 1) probability of no stockout; 2) fill rate. A separate analytical evaluation of the negative binomial approximation has been preliminarily reported elsewhere. In the current study, we apply a modelling and simulation approach to assess whether the approximation-based search procedures, in fact, lead to optimal or near-optimal stock levels.

A modelling and simulation approach to assessment of a negative binomial approximation in a multi-echelon inventory system

LONGO, Francesco;
2014

Abstract

Some studies in the multi-echelon inventory systems literature have used a negative binomial distribution to approximate a critical random variable arising in the model. Graves (1996) developed a multi-echelon inventory model with fixed replenishment intervals, where each site follows a base stock policy. He proposed in the one-warehouse, N-retailer case a negative binomial distribution to approximate a random variable he referred to as 'uncovered demand'. Computational evidence was provided to demonstrate the effectiveness of the approximation. Graves then suggested search procedures for approximately optimal base stock levels at the warehouse and N identical retailers under two customer service criteria: 1) probability of no stockout; 2) fill rate. A separate analytical evaluation of the negative binomial approximation has been preliminarily reported elsewhere. In the current study, we apply a modelling and simulation approach to assess whether the approximation-based search procedures, in fact, lead to optimal or near-optimal stock levels.
multi-echelon inventory model; supply chain; one-warehouse; N-retailer inventory system; base stock policy; negative binomial approximation; modelling and simulation
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/20.500.11770/148974
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 11
  • ???jsp.display-item.citation.isi??? ND
social impact