| Abstract: | This study develops an arborescent (tree-like) inventory model with a constant demand rate. By considering the integration of the producer, distributors and retailers, a mathematical model and an economic ordering policy are developed. It can be shown that the integrated approach results in an impressive cost-reduction compared with an independent decision by the partial party. A numerical example of an arborescent inventory system is attached to demonstrate the economic ordering policy with the help of mathematical software - Maple V. |
