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Timmer, J.B. (2009) A coordination mechanism with fair cost allocation for divergent multi-echelon inventory systems. Memorandum 1895, Department of Applied Mathematics, University of Twente, Enschede. ISSN 1874-4850
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This paper is concerned with the coordination of inventory control in divergent multiechelon inventory systems under periodic review and decentralized control. All the installations track echelon inventories. Under decentralized control the installations will decide upon replenishment policies that minimize their individual inventory costs. In general these policies do not coincide with the optimal policies of the system under centralized control. Hence, the total cost under decentralized control is larger than under centralized control.
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