Abstract

In multistage production systems under uncertainty as well as in local decentralized stochastic inventory control systems, there are often easily described external demand processes and a very complex internal demand depending on the structure of the system, the control policy, and the external demand. In this paper we discuss a functional normal approximation for an internal demand process by a Wiener process with drift. We apply our approach to Sherbrooke's two-echelon model.

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