Journal of the Operational Research Society

, Volume 52, Issue 7, pp 830–838

Multi-echelon multi-company inventory planning with limited information exchange

Technical Note

DOI: 10.1057/palgrave.jors.2601162

Cite this article as:
Fransoo, J., Wouters, M. & de Kok, T. J Oper Res Soc (2001) 52: 830. doi:10.1057/palgrave.jors.2601162

Abstract

Supply chain planning concepts from multi-echelon inventory theory are generally based on some form of centralised planning of supply chains. Those multi-echelon models that do consider decentralised planning, assume complete information and/or a specific single objective function. This paper investigates how multi-echelon inventory theory can accommodate a setting with decentralised decision makers (a supplier and a number of retail groups) without complete information. We present a coordination procedure that does not require the retail groups to exchange demand information, but does allow using opportunities for demand pooling between them. We illustrate our ideas by way of a quantitative analysis of a two-echelon divergent supply chain, with both cooperative and non cooperative retail groups. We conclude that coordination across a supply chain with decentralised control and limited centralised information is feasible by using available algorithms with satisfactory service level and cost performance.

Keywords

supply chain management inventory control distribution allocation 

Copyright information

© Palgrave Publishers Ltd 2001

Authors and Affiliations

  1. 1.Technische Universiteit EindhovenEindhovenThe Netherlands