Simple evaluation of echelon stock (R,Q) policies for two-level inventory systems

A two-level inventory system with one warehouse and N retailers is considered. Leadtimes (transportation times) are constant, and the retailers face different compound Poisson demand processes. All facilities apply continuous review echelon stock <$>(R,Q)<$>policies with different reorder points and batch quantities. We provide a simple method for exact evaluation of holding and shortage costs.

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