Multiechelon inventory systems with lateral supply

Multiechelon inventory systems with lateral supply We develop approximations to estimate the expected backorders in a multiechelon system in which lateral supply actions between bases are allowed when a backorder occurs. These approximations are easy to compute, and the average absolute error over a wide range of parameter values is less than 4% when items are depot repairable, even when bases are dissimilar. With lateral supply, backorder reductions of 30‐50% are not uncommon, and a 72% reduction was observed in two cases. Lateral supply becomes more important with low demand rates. A similar approach was unsuccessful for base‐repairable items. However, lateral supply has a beneficial effect only when the lateral supply time is very short, 1/4 or less of the average base repair time. Even in such cases lateral supply is unlikely to be important in an actual application, because base management can expedite repair of critical items. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Naval Research Logistics: An International Journal Wiley

Multiechelon inventory systems with lateral supply

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Publisher
Wiley
Copyright
Copyright © 1992 Wiley Periodicals, Inc., A Wiley Company
ISSN
0894-069X
eISSN
1520-6750
DOI
10.1002/1520-6750(199202)39:1<29::AID-NAV3220390103>3.0.CO;2-L
Publisher site
See Article on Publisher Site

Abstract

We develop approximations to estimate the expected backorders in a multiechelon system in which lateral supply actions between bases are allowed when a backorder occurs. These approximations are easy to compute, and the average absolute error over a wide range of parameter values is less than 4% when items are depot repairable, even when bases are dissimilar. With lateral supply, backorder reductions of 30‐50% are not uncommon, and a 72% reduction was observed in two cases. Lateral supply becomes more important with low demand rates. A similar approach was unsuccessful for base‐repairable items. However, lateral supply has a beneficial effect only when the lateral supply time is very short, 1/4 or less of the average base repair time. Even in such cases lateral supply is unlikely to be important in an actual application, because base management can expedite repair of critical items.

Journal

Naval Research Logistics: An International JournalWiley

Published: Feb 1, 1992

References

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