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This study considers a two-level supply chain system consisting of one warehouse and a number of identical retailers. In this system, we incorporate transportation costs into inventory replenishment decisions. The transportation cost contains a fixed cost and a variable cost. We assume that the demand rate at each retailer is known and the demand is confined to a single item. First, we derive the total cost which is the sum of the holding mid ordering cost at the warehouse and retailers as well as the transportation cost from the warehouse to retailers. Then, we propose a search algorithm to find the economic order quantities for the warehouse and retailers which minimize the total cost. ©... 

The inventory replenishment policy exploited by a supply chain has a principle role in amplification of order variability compared to fluctuations in customers' demands. This phenomenon is known as the bullwhip effect. In this paper, a four echelon supply chain is simulated and the impacts of continuous and periodic review order-up-to policies on the bullwhip effect are examined. Experiments have been conducted to analyze the influence of the lead time in deterministic conditions, and also the variance of demand and lead time in stochastic circumstances on the bullwhip effect and the corresponding cost. It was observed that in low demand and lead time variances, it is more efficient to...