Replenishment and Lead Time Decisions in Manufacturer-Retailer Chains

This study investigates the decisions of replenishment and lead-time reduction for a single-manufacturer multiple-retailer integrated inventory system in which the probability distribution of demand for each retailer is unknown but its mean and variance are given. A decision model is presented and a minimax distribution free procedure is applied to determine the lead time, the common shipment cycle time, the target levels of replenishments and the number of shipments per production cycle so that the expected total system cost can be minimized. A decision support system has been implemented on a personal computer to illustrate the application of the model.

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