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Demand aggregation is an important concept for controlling inventory in supply chain under uncertain demand. In this concept demand of two or more regions are aggregated, as a result the demand uncertainty is reduced. This concept is very much useful to reduce the safety stocks and it reduces the variability in demand. In this study a demand aggregation model is produced for three different typesof products in two echelon supply chain.This study represents a mathematical model for demand aggregation for different types of product and it provides optimum inventory policy (reorder point, ordering quantity). |
