A Heuristic Methode to Determine Control Parameters for A Two-Echelon Inventory System

The paper presents a Heuristic method which can be used to determine the control parameters for a two-echelon inventory system. The system under consideration consists of one central warehouse and N local ones. Steady stochestic demands occur at local warehouses which order from the central warehouse and it is. the central warehouse's responsibility to order from outside supplier. Both the central and local warehouses are controlled under (T, S) policy. The system seeks the minimum expected total inventory cost under the constraint of satisfying a specified service level.