Allocation policies in general multi-echelon distribution systems with (R, S) order-up-to-policies

In this paper we analyze stock allocation policies in general N-echelon distribution systems, where it is allowed to hold stock at all levels in the network. The goal is to achieve differentiated target customer service levels (fill rates). Various allocation rules and accompanying numerical methods that have already been developed for smaller networks are extended and compared in an extensive numerical experiment. We conclude that the extension of Balanced Stock rationing (see Van der Heijden [1996]) is the most accurate method, in particular in cases of relatively high imbalance. If the imbalance is not too high, the extension of Consistent Appropriate Share rationing (see [De Kok, Lagodimos & Seidel, 1994; Verrijdt & De Kok, 1996]) performs good as well. Keywords: Multi-echelon, inventory, allocation, rationing, divergent