Inventory location problem with stochastic capacity constraints under periodic review (R, S, S)

In this paper we propose a novel inventory location model with stochastic capacity constraints, based on a periodic inventory control policy. This model allows designing the distribution network for a two level supply chain, addressing warehouse location and customer assignment decisions, taking into consideration several aspects of inventory planning, and particularly for evaluating impacts of inventory control review period into network configuration and system costs. Solution approach to the proposed model is based on an exhaustive algorithm, which found an optimal solution for small instances.