Distribution planning for a divergent depotless two-echelon network under service constraints

In this paper we discuss a distribution planning procedure for a system consisting of one central depot supplying a number of end stockpoints. The central depot is not allowed to hold stock and allocates all incoming goods immediately to these end stockpoints. An ordering and allocation policy is presented which is based on a decomposition method. The emphasis lies on the realization of pre-determined target service levels at the end stockpoints. In this paper we present two adjustment methods which improve the service performance considerably in certain cases. Another important contribution of this paper is the generalization of the concept of imbalance. An analytical approximation of the probability of imbalance is presented. An extensive simulation study validates the analytical results.