Stochastic leadtimes in a one-warehouse, N-retailer inventory system with the warehouse not carrying stock
This study extends upon a multi-echelon inventory model developed by Graves, introducing in the one-warehouse, N-retailer caseas Graves suggestedstochastic leadtimes between the warehouse and the retail sites in place of the original deterministic leadtimes. Effects of stochastic leadtimes on required base stock levels at the retail sites in the case where the warehouse carries no stock (e.g., serves as a cross-dock point) were investigated analytically. Two alternative treatments of stochastic leadtime distributions were considered. Using as a baseline Graves computational study under deterministic leadtimes, results of the current study suggest that it may be better to use the deterministic model with an accurately estimated mean leadtime than a stochastic model with a poorly estimated mean leadtime.
stochastic leadtimes inventory multi-echelon inventory system fixed replenishment intervals