Application of Response Surface Methodology in Optimizing a Three Echelon Inventory System

Inventory control is an important subject in supply chain management. In this paper، a three echelon production، distribution، inventory system composed of one producer، two wholesalers and a set of retailers has been considered. Costumers'' demands follow a compound Poisson process and the inventory policy is a kind of continuous review (R، Q). In this paper، regarding the standard cost structure in an inventory model، the cost function of system has been approximated using Response Surface Methodology as a combination of designed experiments، simulation، regression analysis and optimization. The proposed methodology in this paper can be applied as a novel method in optimization of inventory policy of supply chains. Also، the joint optimization of inventory parameters، including reorder point and batch order size، is another advantage of the proposed methodology.