Pontificia Universidad Católica de Chile Pontificia Universidad Católica de Chile
Escalona P., Marianov V., Ordóñez F. and Stegmaier R. (2018)

On the effect of inventory policies on distribution network design with several demand classes

Revista : Transportation Research Part E-Logistics and Transportation Review
Volumen : 111
Páginas : 229-240
Tipo de publicación : ISI Ir a publicación


This paper studies the effect of several inventory policies on the design of a distribution network for fast-moving items able to provide differentiated service levels in terms of product availability for several demand classes. We consider the distribution network design problem when the global round-up, single class allocation, local separate stock, local round-up, and critical level inventory policies are used. We show how to formulate these problems as conic quadratic mixed-integer problems and prove that the critical level policy provides the lowest cost distribution network design. Further results and a computational study show how these different models compare in practice.