IJPAM: Volume 20, No. 2 (2005)

A COORDINATED POLICY MODEL IN
DISTRIBUTION SYSTEM WITH
STOCHASTIC DEMAND

Jian-Guo Hu$^1$, En-Min Feng$^2$, Hua Guo$^3$
$^{1,2}$Department of Applied Mathematics
Dalian University of Technology
Dalian, 116024, P.R. CHINA
$^1$e-mail: jianguohu@163.com
$^3$College of Philosophy
Xiangtan University
Xiangtan, Hunan, 411105, P.R. CHINA


Abstract.This paper addresses a coordinated inventory and ordering policies in two-level distribution system with stochastic demand composing of a single supplier and multiple retailers, in which the supplier (distribution center) takes base-stock policy and deals in multiple products. A mathematical model to maximize expected system profit is developed. Some properties of the model and existence of solutions of the model are analized. Then corresponding solution methods are proposed. Last, three cases on demand are studied and some future researches areas are identified. This work can provide insight for purchasing and inventory decisions of distribution system and supply chain management.

Received: March 15, 2005

AMS Subject Classification: 90B50, 90C45

Key Words and Phrases: supply chain management, distribution system, stochastic demand, coordinated inventory policies, mathematical model

Source: International Journal of Pure and Applied Mathematics
ISSN: 1311-8080
Year: 2005
Volume: 20
Issue: 2