Echelon stock based continuous review (R,Q) policy for fast moving items

The superior performance of echelon stock based policies for multi-stage serial and assembly inventory systems has been well established in literature. De Bodt and Graves [1] were the first to develop an echelon stock based continuous review (R,Q) model for a two-stage serial system. In this paper, we examine their model for fast moving items from the implementation point of view, and suggest a modification that not only takes care of implementation but also leads to improvement of the model under certain conditions. The results are demonstrated with the help of a numerical example.