One-for-one period policy and a series of suppliers

The purpose of this paper is to adopt and analyze a new ordering policy called one-for-one-period policy in a multi-echelon supply chain consisting of one retailer and a series of N suppliers. The main advantage of adopting the one-for-one-period (1,T) ordering policy for retailers is the elimination of uncertainty for supplier which leads to total elimination of the safety stocks at all suppliers. This in turn leads to the reduction of the total system costs and in case any supplier´s ordering cost is negligible it can even eliminate the need for him to carry any inventory. In addition to this advantage, the numerical results show that the application of this new policy for the retailer leads to the further advantage of outperforming the one-for-one (S-1,S) policy in terms of total multi-echelon system cost under specified conditions. We derive the minimum total cost for this multi-echelon system and provide a numerical example to shed light on the merits of the proposed model compared to the common practice as reported in the literature.