SUPPLY RATIONING IN MULTIECHELON DIVERGENT SYSTEMS

In this paper we determine a simple inventory control rule for multi-e chelon distribution systems under periodic review without lot sizing. The primary focus is the two-echelon model with a stockless central de pot, but several extensions(> 2 echelons, central stock allowed) are d iscussed as well. The control rule consists of two parameter sits: a s et of rationing fractions at the central depot with the purpose to min imize inventory imbalance, and a set of order-up-to levels for the loc al stockpoints with the purpose to achieve a target service level (fil l rate) per local stockpoint. The problem to calculate these control p arameters is solved by decomposition in two subproblems. First the rat ioning fractions are determined such that the (approximate) expected s ystem imbalance is minimized. Next the order-up-to levels are calculat ed such that the target fill rates are achieved. Numerical results sho w that this control rule, called Balanced Stock (BS) rationing, is acc urate and more robust than the Consistent Appropriate Share (CAS) rati oning policy. (C) 1997 Elsevier Science B.V.