Risk-Pooling Approach in Inventory Control Model for Multi-products in a Distribution Network Under Uncertainty
Risk-pooling is a substantial approach for controlling inventory in supply chain under uncertainty. In this approach, independent demands of two or more regions are aggregated; as a result, the demand uncertainty is reduced. This approach is also very much useful in reducing the safety stocks. In this study, risk-pooling approach is used in inventory optimization for three different types of products in a two-stage supply chain network under service-level constraint. This study represents a mathematical approach for inventory optimization using risk-pooling concept for different types of the product, and it provides optimum inventory policy (reorder point, ordering quantity, and total cost) along with expected shortages per cycle (ESC), fill rate (FR), safety stock (SS), and average inventory (AI).
KeywordsRisk-pooling Inventory optimization Multi-products Uncertainty
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