A queuing approach for inventory planning with batch ordering in multi-echelon supply chains

Jain, Sandeep and Raghavan, NR Srinivasa (2009) A queuing approach for inventory planning with batch ordering in multi-echelon supply chains. In: Central European Journal of Operations Research, 17 (1). pp. 95-110.

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Abstract

This paper presents stylized models for conducting performance analysis of the manufacturing supply chain network (SCN) in a stochastic setting for batch ordering. We use queueing models to capture the behavior of SCN. The analysis is clubbed with an inventory optimization model, which can be used for designing inventory policies . In the first case, we model one manufacturer with one warehouse, which supplies to various retailers. We determine the optimal inventory level at the warehouse that minimizes total expected cost of carrying inventory, back order cost associated with serving orders in the backlog queue, and ordering cost. In the second model we impose service level constraint in terms of fill rate (probability an order is filled from stock at warehouse), assuming that customers do not balk from the system. We present several numerical examples to illustrate the model and to illustrate its various features. In the third case, we extend the model to a three-echelon inventory model which explicitly considers the logistics process.

Item Type:	Journal Article
Publication:	Central European Journal of Operations Research
Publisher:	Springer
Additional Information:	The copyright of this article belongs to Springer.
Keywords:	Order batching;Queuing systems;Inventory optimization;Multi-echelon.
Department/Centre:	Division of Interdisciplinary Sciences > Management Studies
Date Deposited:	30 Oct 2009 11:23
Last Modified:	19 Sep 2010 05:27
URI:	http://eprints.iisc.ac.in/id/eprint/19205

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