Journal of the Korean Operations Research and Management Science Society (한국경영과학회지)
- Volume 15 Issue 1
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- Pages.63-72
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- 1990
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- 1225-1119(pISSN)
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- 2733-4759(eISSN)
Determination of Safety Stock in a Multi-Echelon Inventory System
다단계 재고 시스템의 안전재고의 결정
Abstract
This problem in this paper concerns the determination of safety stock for multi-echelon invenetory system. In this model the criterion is to minimize system safety stock subject to a service level constraint and expected annual total cost. Then, safety stock is determined by minimizing expected annual total cost and satisfying given service level. This expected annual total cost is obtained by expected total inventory holding cost plus the expected total stockout cost. Numerical example is given in a three-echelon inventory system. The results obtained by the use of the Hill Algorithm.
Keywords