A New replenishment Policy in a Two-echelon Inventory System with Stochastic Demand

In this paper we consider a two-echelon inventory system consisting of one central warehouse and a number of non-identical retailers. The warehouse uses a regular one-for-one policy to replenish its inventory, but the retailers apply a new policy that is each retailer orders one unit to central warehouse in a pre-determined time interval. The most advantage of this policy is that the retailers´ orders, which constitute warehouse demand, are deterministic. For this system we show how the inventory costs can be evaluated. By the numerical examples we compare our policy with one-for-one policy