An Optimal Joint Multi-Item Replenishment Policy for a Two-Level Supply Chain: Centralized versus Decentralized Decision

Abstract

Any industry has its own supply chain where it is not necessary to have all stages in the supply chain and the optimal o rdering policies of those indiv idual stages may be different. This paper p resents an extension of two–level supply chain inventory model d iscussed in related works. The main consideration of this paper is to determine the optimal ordering policy according to inventory and transportation costs in a two stage supply chain consisting of warehouse and retailer in case of multip le–items. The evaluation is based on centralized and decentralized decisions for a retailer and a single warehouse. A model is developed and finally a case study is presented to illustrate the proposed approach. The numerical results show that the centralized decision results in a significant saving compared to the decentralized one. It is, therefore, ev ident that the proposed model for the centralized policy ensures more profitability of the whole system.

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Cite this paper

@inproceedings{Ahsan2013AnOJ, title={An Optimal Joint Multi-Item Replenishment Policy for a Two-Level Supply Chain: Centralized versus Decentralized Decision}, author={A. M. M. Nazmul Ahsan and Kazi Arif-Uz-Zaman and Nazma Sultana}, year={2013} }