A Deterministic Multiechelon Inventory Model
NAVAL POSTGRADUATE SCHOOL MONTEREY CA
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The classic single echelon inventory model is restructured as a two echelon problem in which demand and resupply are deterministic. Using cost minimization as the objective, three models are developed which address the problems of 1 no stockouts allowed EOQ, 2 backorders allowed, and 3 finite production with no stockouts allowed. General solutions for the optimal policy are obtained in the EOQ and finite production models. In the backorder model, the analytical argument is limited to the case in which only time dependent backorder costs occurs. Algorithms are developed for solving problems for all three models, and selected parameter values are used to test the behavior of the models.
- Administration and Management
- Operations Research