Jeannette Song. Inventories with Multiple Supply and Demand Sources and Networks of Queues with Overflow Bypasses*

Abstract. Consider an inventory system with multiple supply sources. The replenishment leadtimes from each source are stochastic, representing congestion and disruption. We develop performance evaluation tools for a family of reasonable order policies. These policies take into account real-time supply information, which can be obtained through tracking technologies such as GPS and RFID. Performance evaluation of such state-dependent policies is generally hard. The main thrust of the paper is to show that, under these policies, the supply system becomes a network of queues with a special routing mechanism called an overflow bypass. The solution has a simple product form. Thus, we obtain closed-form performance measures. These results reinterpret and extend Moinzadeh and Schmidt's analysis of a system with two sources having deterministic leadtimes. We further extend the analysis to batch ordering policies and multiple demand classes.

* Joint work with Paul Zipkin