An exact solution procedure for multi-item two-echelon spare parts inventory control problem with batch ordering in the central warehouse

Abstract

We consider a multi-item two-echelon inventory system in which the central warehouse operates under a ( Q , R ) policy, and the local warehouses implement basestock policy. An exact solution procedure is proposed to find the inventory control policy parameters that minimize the system-wide inventory holding and fixed ordering cost subject to an aggregate mean response time constraint at each facility.