A study of periodic review two-level supply chain inventory model

概要

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We consider a single product, two-stag supply chain inventory model with the upstream warehouse and the downstream retailer which is observed periodically. The demand for a product is random. The optimal supply chain inventory policy to minimize the total discounted expected cost is derived via dynamic programming. The problem is analyzed in single, two, multiple and infinite periods. Under certain conditions, we show that the problem for the retailer is a Newsboy-type problem and that the optimal policy is characterized by a single critical number for the initial supply chain inventory level. We further show that in all cases, the optimal policy for the warehouse is a base-stock policy where the optimal base-stock level depends on the initial supply chain inventory level. Numerical analysis is examined to gain insight into the problem.