Distributed order-up-to inventory management in logistic networks under uncertain demand — System modelling and analysis

In this paper, inventory control problem in goods distribution systems having network architecture is addressed. As opposed to the majority of previous approaches, directed for serial and arborescent configurations, a mesh topology is analyzed. In the considered system, the exogenous, uncertain demand may be placed at each network node. The transfer of goods between the nodes, governed by the order-up-to stock management strategy, is performed with non-negligible lead-time delay. A model of node dynamic interaction is proposed and described in an appropriately chosen state space. Formal guidelines for the reference stock level selection are presented. The developed model incorporating distributed order-up-to policy is subjected to formal and numerical analysis.