Stochastic analytical models
Cohen and Lee [11] develop a model for establishing
a material requirements policy for all materials
for every stage in the supply chain production
system. In this work, the authors use four difierent
cost-based sub-models (there is one stochastic submodel
for each production stage considered). Each
of these sub-models is listed and described below
[11]:
1. Material control: Establishes material ordering
quantities, reorder intervals, and estimated response
times for all supply chain facilities, given
lead times, Þll rates, bills of material, cost data,
and production requirements.
2. Production control: Determines production lot
sizes and lead times for each product, given
material response times.
3. Finished goods stockpile (warehouse): Determines
the economic order size and quantity for each
product, using cost data, fill rate objectives, production
lead times, and demand data.
4. Distribution: Establishes inventory ordering policies
for each distribution facility, based on fill rate objectives.
Stochastic analytical modelsCohen and Lee [11] develop a model for establishinga material requirements policy for all materialsfor every stage in the supply chain productionsystem. In this work, the authors use four difierentcost-based sub-models (there is one stochastic submodelfor each production stage considered). Eachof these sub-models is listed and described below[11]:1. Material control: Establishes material orderingquantities, reorder intervals, and estimated responsetimes for all supply chain facilities, givenlead times, Þll rates, bills of material, cost data,and production requirements.2. Production control: Determines production lotsizes and lead times for each product, givenmaterial response times.3. Finished goods stockpile (warehouse): Determinesthe economic order size and quantity for eachproduct, using cost data, fill rate objectives, productionlead times, and demand data.4. Distribution: Establishes inventory ordering policiesfor each distribution facility, based on fill rate objectives.
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