Department   Ritsumeikan Asia Pacific University  College of Sustainability and Tourism
   Position   Professor
Language English
Publication Date 2021/09
Type Research paper (Academic/Professional Journal)
Peer Review Peer reviewed
Title Cost Approximation of a Three-echelon Inventory System with
Order Splitting and Information Sharing
Contribution Type Corresponding
Journal International Journal of Industrial Engineering & Production Research (IJIEPR)
Journal TypeAnother Country
Publisher Iran University of Science and Technology
Volume, Issue, Page 32(3),pp.1-15
Total page number 15
Responsible for technical issues and corresponding author
Author and coauthor Arezou Ghahghaei, Mehdi Seifbarghy & Davar Pishva
Details This paper develops an approximate cost function for a three-echelon supply chain that has two
suppliers, a central warehouse and an arbitrary number of retailers. It takes an integrated approach to multi-echelon inventory control and order-splitting problems. It adds two suppliers as the third echelon to the traditional two-echelon supply chain and considers dynamic sequence of orders arrival to the warehouse at each cycle. Total cost of the three-echelon inventory system is approximated based on the average unit cost and its accuracy is assessed through simulation. Numerical results with relatively low errors confirms the accuracy of the model. It also shows how to further enhance its accuracy by either increasing the holding cost at all echelons or the penalty cost at the retailers.