Stock allocation in general multi-echelon distribution systems with (R, S) order-up-to-policies

M.C. van der Heijden, E.B. Diks, A.G. de Kok

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Abstract

In this paper we analyze stock allocation policies in general N-echelon distribution systems, where it is allowed to hold stock at all levels in the network. The goal is to achieve differentiated target customer service levels (fill rates). Various allocation rules and accompanying numerical methods that have already been developed for smaller networks are extended and compared in an extensive numerical experiment. We conclude that the extension of Balanced Stock rationing (see Van der Heijden (1996)) is the most accurate method, in particular in cases of relatively high imbalance. If the imbalance is not too high, the extension of Consistent Appropriate Share rationing (see De Kok et al., 1994; Verrijdt and De Kok, 1996) performs good as well.
Original languageEnglish
Pages (from-to)157-174
Number of pages18
JournalInternational journal of production economics
Volume49
Issue number2
DOIs
Publication statusPublished - 1997

Fingerprint

Numerical methods
Experiments
Distribution system
Order-up-to policy
Multi-echelon
Imbalance
Rationing
Service levels
Allocation rules
Numerical experiment
Customer service

Keywords

  • METIS-124348
  • IR-20717

Cite this

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title = "Stock allocation in general multi-echelon distribution systems with (R, S) order-up-to-policies",
abstract = "In this paper we analyze stock allocation policies in general N-echelon distribution systems, where it is allowed to hold stock at all levels in the network. The goal is to achieve differentiated target customer service levels (fill rates). Various allocation rules and accompanying numerical methods that have already been developed for smaller networks are extended and compared in an extensive numerical experiment. We conclude that the extension of Balanced Stock rationing (see Van der Heijden (1996)) is the most accurate method, in particular in cases of relatively high imbalance. If the imbalance is not too high, the extension of Consistent Appropriate Share rationing (see De Kok et al., 1994; Verrijdt and De Kok, 1996) performs good as well.",
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Stock allocation in general multi-echelon distribution systems with (R, S) order-up-to-policies. / van der Heijden, M.C.; Diks, E.B.; de Kok, A.G.

In: International journal of production economics, Vol. 49, No. 2, 1997, p. 157-174.

Research output: Contribution to journalArticleAcademicpeer-review

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