A continuous time multi-echelon inventory model for deteriorating items with transshipment

Abstract

In this paper, we propose a continuous time model for a multi-echelon inventory system. Items in the inventory are deteriorating. Lateral transshipment are allowed among the warehouses in the same echelon where transshipment rate depends on the inventory level of the corresponding warehouses. We give some sufficient conditions for the equilibrium points of the system to be stable. By aggregating the warehouses in an echelon, a fast procedure is developed for finding the equilibrium values of inventory level at each warehouse.