The Stabilizing Effect of Distribution Center Inventory

• Autor(a) principal: Baganha, Manuel P.
• Data de Publicação: 1990
• Outros Autores: Cohen, Morris A.
• Tipo de documento: Artigo
• Idioma: por
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/85283

This paper presents a hierarchical model framework for the analysis of the stabilizing effect of inventories in multiechelon manufacturing/distribution systems. This framework is used to analyze some recent results presented in the literature which compare the variance of demand to the variance of replenishment orders. These results have generated controversy since they suggest that, in most industries, inventories have a destabilizing effect. We reexamine these conclusions and present empirical observations that indicate that the mechanisms which promote stabilization are dependent on echelon position. These results are also compatible with our normative model framework which defines sufficient conditions for the existence of stabilization due to inventories.