Inventory Model for Distribution System with Stochastic Lead Time and Order Crossover

DOI: 10.5176/2251-1938_ORS17.8

Authors: Gitae Kim

Abstract:

This paper proposes an inventory model for a distribution system which consists of one warehouse and multiple retailers when the lead time is stochastic and order crossovers are taken into account. Order crossovers occur if orders do not arrive in the sequence in which they were placed. Although order crossovers are often neglected in the inventory models, they are encountered frequently in practice. Order crossovers have been commonly considered in the system of one buyer and one supplier. In this research, we consider (R, S) inventory policy and suggest an inventory model for a distribution system under order crossover.

Keywords: component; Inventory Management, Distribution System, Order Crossover, Stochastic Lead Time