Technical Note—Capacitated Serial Inventory Systems: Sample Path and Stability Properties Under Base-Stock Policies

Abstract

We study a periodically reviewed multiechelon serial inventory system with a capacity constraint on the order quantity at every stage. Under echelon base-stock policies, we demonstrate a simple sample-path result that maps the echelon shortfalls in the serial system to the shortfalls of suitably defined single-stage systems. Because the shortfall processes of single-stage systems are well understood, our result allows us to reinterpret results in the literature on the stability and regeneration times of such multiechelon systems in a simpler fashion with weaker assumptions.