ALLOCATION POLICIES AND COST APPROXIMATIONS FOR MULTILOCATION INVENTORY SYSTEMS.
Consider a central depot that supplies several locations experiencing random demands. Periodically, the depot may place an order for exogenous supply. Orders arrive after a fixed leadtime, and are then allocated among the several locations. Each allocation reaches its destination after a further delay. The paper considers the special case where the penalty-cost/holding-cost ratio is constant over the locations. Several approaches are given to approximate the dynamic program describing the problem. Each approach provides both a near-optimal order policy and an approximation of the optimal cost of the original problem.
- Federgruen, A; Zipkin, P
- Naval Research Logistics Quarterly
Volume / Issue
- 31 / 1
Start / End Page
- 97 - 129