Optimal Policies for Multiechelon Inventory Problems with Markov-Modulated Demand

@article{Chen2001OptimalPF,
  title={Optimal Policies for Multiechelon Inventory Problems with Markov-Modulated Demand},
  author={Fangruo Chen and Jing-Sheng Song},
  journal={Operations Research},
  year={2001},
  volume={49},
  pages={226-234}
}
This paper considers a multistage serial inventory system with Markov-modulated demand. Random demand arises at Stage 1, Stage 1 orders from Stage 2, etc., and Stage N orders from an outside supplier with unlimited stock. The demand distribution in each period is determined by the current state of an exogenous Markov chain. Excess demand is backlogged. Linear holding costs are incurred at every stage, and linear backorder costs are incurred at Stage 1. The ordering costs are also linear. The… CONTINUE READING
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