Multi-echelon multi-company inventory planning with limited information exchange

J.C. Fransoo*, Marc Wouters, A.G. Kok de

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review


Supply chain planning concepts from multi-echelon inventory theory are generally based on some form of centralised planning of supply chains. Those multi-echelon models that do consider decentralised planning, assume complete information and/or a specific single objective function. This paper investigates how multi-echelon inventory theory can accommodate a setting with decentralised decision makers (a supplier and a number of retail groups) without complete information. We present a coordination procedure that does not require the retail groups to exchange demand information, but does allow using opportunities for demand pooling between them. We illustrate our ideas by way of a quantitative analysis of a two-echelon divergent supply chain, with both cooperative and non cooperative retail groups. We conclude that coordination across a supply chain with decentralised control and limited centralised information is feasible by using available algorithms with satisfactory service level and cost performance.
Original languageEnglish
Pages (from-to)830-838
Number of pages9
JournalJournal of the Operational Research Society
Issue number7
Publication statusPublished - 2001
Externally publishedYes


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