DOI: 10.5176/2251-1938_ORS17.25
Authors: Moumita Tewary, Debabrata Das and Nirmal Baran Hui
Abstract:
This paper identified a mechanism for obtaining the optimal inventory for a three-echelon distributed system. The system involves one warehouse, two distributors and three retailers. The basic purpose was to minimize the total inventory cost. The mathematical model is derived using the concept of Roundy’s PO2 policy. The problem is posed as a minimization problem subject to the three constraints and involving five variables. The solution to the problem is achieved using an exhaustive search method. During this process a total of 248832 numbers of solutions is searched. Out of which only 198 solutions (i.e., only 0.08{6e6090cdd558c53a8bc18225ef4499fead9160abd3419ad4f137e902b483c465}, approximately) are found to be feasible in nature. The best solution and corresponding variables are noted. Reorder point of all installations is also determined in the paper.
Keywords: 3-echelon distributed system, Roundy’s PO2 Policy, mathematical formulation.
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