Analysis of Two-Echelon Inventory System with Two Suppliers
Journal Title: International Journal of Mathematics and Statistics Invention - Year 2017, Vol 5, Issue 1
Abstract
tories exist throughout the supply chain in various form for various reasons. Since carrying these inventories can cost anywhere from 20-40 % of their value a year, managing them in a scientific manner to maintain minimal levels makes economic sense. This paper presents a continuous review two echelon inventory system. The operating policy at the lower echelon is (s, S) that is whenever the inventory level traps to s on order for Q = (S-s) items is placed, the ordered items are received after a random time which is distributed as exponential. We assume that the demands accruing during the stock-out period are lost. The retailer replenishes their stock from the regular supplier which adopts (0,M) policy, M = n1Q. When the regular supplier stock is empty the replacement of retailer stock made by the outside supplier who adopts (0, N) policy N = n2Q. The joint probability disruption of the inventory levels of retailer, regular supplier and the outside supplier are obtained in the steady state case. Various system performance measures are derived and the long run total expected inventory cost rate is calculated. Several instances of a numerical examples, which provide insight into the behaviour of the system are presented.
Authors and Affiliations
S. Mohamed Basheer, K. Krishnan
Keywords
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