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On the effect of centralization on expected costs in a multi-location newsboy problem. (English) Zbl 0736.90025
Summary: This paper deals with a single-period, single-product inventory model with several individual sources of demand. It is a multi-location problem with an opportunity for centralization. Two types of inventory system are considered in this paper: the decentralized system and the centralized system. The aim of this paper is to extend G. D. Eppen’s model [Manage. Sci. 25, 498-501 (1979; Zbl 0419.90049)] by adding the consideration of transportation costs to constitute a new inventory model. With this new inventory model we prove three theorems that include the results of Eppen’s model.

90B05 Inventory, storage, reservoirs
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