In this study, we examine replenishment coordination strategies for multiple location inventory systems. In particular, we study a stochastic joint replenishment policy class for a two-echelon divergent inventory system. Starting with the single location model which represents a two-echelon supply chain for a single item with multiple locations, where the upper echelon employs cross docking, we extend our model to incorporate multi-location settings where the upper echelon also holds inventory. Our modeling methodology based on the development of the ordering process by the lower echelon provides an analytical tool to investigate various joint replenishment policies. An extensive numerical study is conducted to determine the performance of the system and identify regions of dominance across policies. Our findings have implications for design and management of supply chains.
Pizza lunch sponsored by The Logistics Institute.
