Order-up-to networked policy for periodic-review goods distribution systems with delay

In this paper, inventory control problem in goods distribution networks with non-negligible transshipment delay is addressed. In contrast to the majority of earlier approaches, system modeling and policy design do not assume simplified system structure, such as a serial, or a tree-like one. The network nodes, in addition to satisfying market demand, answer internal requests with delay spanning multiple periods. The stock in the network is refilled from uncapacited outside sources. A dynamic model of the considered class of goods distribution systems is constructed and a new inventory policy is formulated. The proposed policy shares similarity with the classical order-up-to one, yet provide improved performance owing to the networked perspective assumed in the design process.