Modeling and Analysis of Two-Echelon Inventory System for Telecom Operators in China

Abstract

To accurately characterize and effectively control the two-echelon inventory system of a telecom operator, this paper establishes a model consisting of a distribution center with multiple warehouses, with an objective function for the optimization of average total inventory and delivery costs. And the model determines two-echelon distribution system's regular stock replenishment policy, safety stock policy and transshipment policy to improve the operational efficiency of the overall supply chain. A numerical example is provided at the end of the paper to illustrate the applicability of the proposed model and methodology.