This paper develops a METRIC-like method to optimize inventory allocations for low-demand items in a multi-echelon finished goods distribution system. The allocations are made by trading-off total inventory investment against service levels as measured by the stockout probabilities. We focus on a one-product three-echelon system and develop a solution procedure for such a system. We then apply that model and solution procedure to an illustrative example and compare the resulting inventory policies to optimal policies for a two-echelon system. © Springer-Verlag Berlin Heidelberg 2005.
CITATION STYLE
Lin, J. R., Nozick, L. K., & Turnquist, M. A. (2005). Inventory allocation with multi-echelon service level considerations. In Lecture Notes in Computer Science (Vol. 3483, pp. 499–508). Springer Verlag. https://doi.org/10.1007/11424925_53
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