ONE-WAREHOUSE MULTIRETAILER SYSTEMS WITH CENTRALIZED STOCK INFORMATION

We consider a distribution system with a central warehouse and multipl e retailers. The warehouse orders from an outside supplier and repleni shes the retailers which in turn satisfy customer demand. The retailer s are nonidentical, and their demand processes are independent compoun d Poisson. There are economies of scale in inventory replenishment, wh ich is controlled by an echelon-stock, batch-transfer policy. For the special case with simple Poisson demand, we develop an exact method fo r computing the long-run average holding and backorder costs of the sy stem. Based on this exact method, we provide approximations for compou nd Poisson demand. Numerical examples are used to illustrate the accur acy of the approximations. We also present a numerical comparison betw een the average costs of a heuristic, echelon-stock policy and an exis ting lower bound on the average costs of all feasible policies.