MODELING STOCHASTIC LEAD TIMES IN MULTIECHELON SYSTEMS

In many multi-echelon inventory systems, the lead times are random var iables. A common and reasonable assumption in most models is that repl enishment orders do not cross, which implies that successive lead time s are correlated. However, the process that generates such lead times is usually not well defined, which is especially a problem for simulat ion modeling, In this paper, we use results from queuing theory to def ine a set of simple lead time processes guaranteeing that (a) orders d o not cross and (b) prespecified means and variances of all lead times in the multi-echelon system are attained.