Stochastic considerations of Grubbström—Molinder model of MRP, input-output and multi-echelon inventory systems

Abstract

In a recent paper (Grubbström and Molinder, 1994) Grubbström and Molinder studied theoretically the dynamic relationship between MRP, input-output analysis and multi-echelon inventory systems. In this paper we upgrade this approach including in the model the uncertainty of external demand and decision theory elements. In the model we suppose that we know only the upper and lower bounds of external demand rate and, because of lack of information, that the external demand is uniformly distributed. The complete decision model for our case is considered and the advantages of this approach are demonstrated.