EFFICIENT INVENTORY MANAGEMENT IN MULTIECHELON DISTRIBUTION-SYSTEMS

In this paper, an improved DRP method to schedule multi-echelon distri bution network is proposed such that order-quantities and order points are dynamically obtained to meet the demand in just in time concept a nd minimize the out-of-stock probability. The order scheduling method reflects the dynamic characteristics of inventory level changes in the regional distribution centers and the central distribution center. Th e experiment has been done with various demand distributions, forecast error distributions and lead times. The proposed method was compared with the traditional DRP-based scheduling methods which use different lot-sizing and order point decision techniques. From the result, it is found that the proposed heuristic method yields preferable lot-sizing schedules. (C) 1997 Elsevier Science Ltd.