Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Decentralised and centralised control of a two-stage distribution system

Decentralised and centralised control of a two-stage distribution system This paper analyses the inventory costs of a two-stage distribution system consisting of one warehouse and multiple retailers. When the distribution system is decentralised, we model the decision problem of each player into a Markov decision process by introducing an order-delivery rate matrix. An iterative algorithm is developed to obtain the system equilibrium. When the system is centralised, we directly model the decision problem into a Markov decision process. A numerical example shows that the cost of the centralised distribution system is about 40% lower than the cost of the decentralised system. Furthermore, some properties of the costs are numerically observed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Services Operations and Informatics Inderscience Publishers

Decentralised and centralised control of a two-stage distribution system

Loading next page...
 
/lp/inderscience-publishers/decentralised-and-centralised-control-of-a-two-stage-distribution-O0N25E4PyW
Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1741-539X
eISSN
1741-5403
Publisher site
See Article on Publisher Site

Abstract

This paper analyses the inventory costs of a two-stage distribution system consisting of one warehouse and multiple retailers. When the distribution system is decentralised, we model the decision problem of each player into a Markov decision process by introducing an order-delivery rate matrix. An iterative algorithm is developed to obtain the system equilibrium. When the system is centralised, we directly model the decision problem into a Markov decision process. A numerical example shows that the cost of the centralised distribution system is about 40% lower than the cost of the decentralised system. Furthermore, some properties of the costs are numerically observed.

Journal

International Journal of Services Operations and InformaticsInderscience Publishers

Published: Jan 1, 2006

There are no references for this article.