Optimal Inventory Policy in Beer Distribution Game

Beer Distribution Game에서의 최적 재고정책

Recently, many studies on the supply chain management have been published due to increasing attention placed on the design and performance analysis of the supply chain as a whole. Using the Beer distribution game introduced in Sterman[1995], we develop a simple order-up-to-R inventory model to minimize sum of the inventory holding cost and shortage cost under probabilistic demand. We show that performance of the model is robust through extensive simulation experiment. Applying the model to serially connected supply chain, we observe that, if the unit shortage cost is relatively high, R value computed independently is an optimal solution.