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Inventory Positioning in Multiple Product Supply Chains

Annals of Operations Research volume 126, pages 195–213 (2004)Cite this article

Abstract

In this paper we address the problem of inventory positioning, i.e., the determination of the supply chain node where inventory should be held, to minimize holding costs given a pre-specified order fill rate. A single-echelon inventory system with multiple products models the problem. The value of inventory is assumed to be an increasing function of the amount of processing performed at upstream nodes, while achieved fill-rates are dependent on the distance or time between the inventory storage and customer locations. We propose a novel analytical approach to solve the problem for the case of normally distributed demand that is based on iterative calculations of inventory holding costs at the various potential inventory locations.

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Authors and Affiliations

  1. Management Sciences Laboratory, Department of Management Science & Technology, Athens University of Economics and Business, Athens, 11362, Greece

    George Ioannou, Gregory Prastacos & Georgia Skintzi

Authors
  1. George Ioannou
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  2. Gregory Prastacos
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  3. Georgia Skintzi
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Ioannou, G., Prastacos, G. & Skintzi, G. Inventory Positioning in Multiple Product Supply Chains. Annals of Operations Research 126, 195–213 (2004). https://doi.org/10.1023/B:ANOR.0000012281.60737.a1

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  • DOI: https://doi.org/10.1023/B:ANOR.0000012281.60737.a1

  • inventory management
  • supply chain design