Demand management in Multi-Stage Distribution Chain

T. de Kok, F.B.S.L.P. Janssen

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Abstract

In this paper we discuss demand management problems in a multi-stage distribution chain.We focus on distribution chains where demand processes have high variability due to a few large customer orders.We give a possible explanation, and suggest two simple procedures that help to smooth demand.It is shown that these procedures yield stock reductions of 40%-50% in practical situations.The quantitative results are based on the analysis of the underlying model related to the two procedures proposed, called large order overflow, applicable if the supplying organization executes a multi-stage distribution chain, and delivery splitting, applicable to any situation.
Original languageEnglish
Place of PublicationTilburg
PublisherOperations research
Number of pages23
Volume1996-39
Publication statusPublished - 1996

Publication series

NameCentER Discussion Paper
Volume1996-39

Keywords

  • demand
  • distribution

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