In this paper an attempt has been made to develop a model for a multilevel integrated production-inventory system, where service times are available at each of the stock points. An ‘ order upto ’ policy is adopted, so that the replenishment order quantity at the beginning of any period is adjusted by the total ‘ inventory discrepancy ’. The total cost of the system consists of inventory carrying costs at the various stock points, and the cost of failure to meet the demands experienced at the end-item stock points. The service time for satisfying the demands for the end product shall be assumed to be exogenously determined. The service times made available at the various intermediate level stock points, including the stock point of raw materials, shall be endogenous variables. The outputs of the model would be to determine whether it is economical to maintain a particular stock point, the economical quantities of stocks to be maintained at permanent stock points, the reliability of the system, and the most...