A Stochastic Optimization Model for a Multi-Echelon Inventory System with Direct Demand that Consists of Two Commodities

Authors

  • PRABAHARAN K Part- time Research Scholar, Mathematics (Alagappa University, Karaikudi)
  • VIRUMANDI C Full time Research Scholar, Alagappa University, Karaikudi
  • BAKTHAVACHALAM R Assistant Professor of Mathematics (Government Arts and Science College for Women, Paramakudi)

DOI:

https://doi.org/10.19139/soic-2310-5070-2969

Keywords:

Multi-echelon system, Two-commodity, Continuous review, Optimization

Abstract

In this paper, we present a stochastic optimization model for a multi-echelon inventory system with directdemand, handling two interrelated commodities. The system consists of a three-level continuous review inventory model,comprising a warehouse (WH), a single distribution center (DC), and a retailer (R). A (s; S) inventory policy is implemented,assuming Poisson demand and exponentially distributed lead times at the retail node. The DC replenishes retailers in fixedpack sizes Qi(= Si - si), while the WH provides an abundant supply. We derive the steady-state probability distributionand key performance measures, offering insights into system efficiency and operational characteristics

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Published

2025-12-08

How to Cite

K, P., C, V., & R, B. (2025). A Stochastic Optimization Model for a Multi-Echelon Inventory System with Direct Demand that Consists of Two Commodities. Statistics, Optimization & Information Computing, 15(3), 1776–1783. https://doi.org/10.19139/soic-2310-5070-2969

Issue

Vol. 15 No. 3 (2026)

Section

Research Articles

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