Replenishment in a Multi-echelon Channel Environment

  • David Frederick Ross


Chapter 8 was concerned with a discussion of statistical inventory management in an independent demand environment where items are stocked at a single facility. Many firms, however, must contend with the planning and deployment of items in a multi-echelon distribution channel. Perhaps the critical characteristics of supply channel planning is the fact that items are stocked at more than one geographical facility and that many of the facilities are dependent on one or more supplying facilities in the channel for replenishment. Distribution network structures are expressed in much the same manner as production bills of material (BOMs). Facility dependencies are linked by echelon (level) to their respective parent supplying facilities that, in turn, may be dependent on still higher echelons of facilities for resupply. The highest echelon in the structure is the supplier or product manufacturer. When independent company supply chains are linked to other company supply chains, they become multi-company networks and are at the center of supply chain inventory management.

Supplementary material

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Problem 9.1 (XLSX 15 kb)
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Problem 9.2 (XLSX 10 kb)
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Problem 9.3 (XLSX 14 kb)
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Problem 9.4 (XLSX 14 kb)
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Problem 9.5 (XLSX 15 kb)
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Problem 9.6 (XLSX 13 kb)
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Problem 9.7 (XLSX 14 kb)
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Problem 9.8 (XLSX 13 kb)
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Problem 9.9 (XLSX 14 kb)
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Problem 9.10 (XLSX 17 kb)
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Exercise 9.1 DRP Safety Stock (XLSX 11 kb)
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Exercise 9.2 Square-root rule (XLSX 14 kb)
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Exercise 9.3 Multiechelon push system allocation (XLSX 16 kb)
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Exercise 9.4 Fair share allocation (XLSX 14 kb)
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aDRP gids (XLSX 48 kb)
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Case Study (XLSX 23 kb)
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Figure 9.5 (XLSX 15 kb)
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Session 9 excel origs figures and tables (XLSX 121 kb)
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Case Study – Solution (XLSX 14 kb)
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Chapter 9 (PPTX 1745 kb)


  1. 1.
    Lee, Haul L., V. Padmanabhan, and Seungjin Whang. 1997. The bull whip effect in supply chains. Sloan Management Review 38(3): 93–102.Google Scholar
  2. 2.
    Adapted from Ibid., 94.Google Scholar
  3. 3.
    See the discussion in Chopra, Sunil, and Peter Meindl. 2010. Supply chain management: Strategy, planning, and operation, 4th ed, 473–477. New York: Prentice Hall.Google Scholar
  4. 4.
    This subject is based on the discussion in Ballou, Ronald H. 1999. Business logistics management, 4th ed, 319–321. New Jersey: Prentice Hall.Google Scholar
  5. 5.
    Reference Bowersox, Donald J., David J. Closs, M. Bixby Cooper, and John C. Bowersox. 2013. Supply chain logistics management, 4th ed, 176–177. New York: McGraw-Hill.Google Scholar

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • David Frederick Ross
    • 1
  1. 1.APICSChicagoUSA

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