Inventory Management in Two-Echelon Chain with Shortage

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Sodachi, Majid | 2018

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 50515 (01)
University: Sharif University of Technology
Department: Industrial Engineering
Advisor(s): Haji, Alireza
Abstract:
The thesis has considered a two-echelon supply chain which consists of one central warehouse and multiple retailers. Assume all retailers and the warehouse follow a continuous review inventory model. The costumer’s demand comes to retailers in a Poisson process. The retailers replenish their stocks from the warehouse in an (S-1, S) inventory control policy and the warehouse replenishes its stocks in an (r, Q) inventory control policy from an external supplier with an infinite capacity. It may be more representative to model stockouts as lost sales when the retailers are in a competitive market or in monopoly markets all demand will be backorder. Therefore, if the market situation goes between competitive and monopoly, it is more logical to have a number of backorders and after that, new demands will be missed. We call it as partial backorders. Using the well-known METRIC-approximation as a framework to obtain the total cost. In the numerical results, we show that the retailer’s function is convex as well as warehouse’s function for any fix reorder points
Keywords:
Inventory Model ; Lost Sale ; Queueing System ; Poisson Process ; Partial Backorder Demand ; Two-level Inventory System ; Metric Approximation

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