Characterizing order processes of using inventory policies in supply chains

This study characterizes order processes under (R,nQ) inventory policies. We show first that the order distribution at an installation is stationary when it uses an (R,nQ) control policy, for any arbitrary stationary distribution of customer demand. We then quantify variance amplification and show that variance of orders is never less than the demand variance. Finally, we extend the analysis to the case where the supply chain comprises of one distributor and N retailers serving customers.