Inventory/distribution control system in a one-warehouse/multi-retailer supply chain

This paper proposes a new inventory control system called the inventory/distribution plan (IDP) control system for a one-warehouse/multi-retailer supply chain. In the IDP control system, a proposed mixed-integer linear programming model is solved to determine an optimal IDP that controls the inventories of the supply chain. The efficiency of the IDP control system is compared to that of the echelon-stock R,s,S control policy, where R is a periodic review interval, s is a reorder point, and S is an order-up-to level, at various fill rates. The experimental results show that when the system faces non-stationary demands, the IDP control system significantly outperforms the echelon-stock R,s,S control system because it can give lower total costs for all ranges of fill rates. (C) 2008 Elsevier B.V. All rights reserved.