Describe the business situation warranting the decision for a multi-level v/s a single level inventory model. Concept Introduction: A multi-level inventory model is also called a multiechelon model which means having more than one level of warehouses to the retail store. A single level means the supplier/distributor directly sending to the retailer servicing the customer. Such a single echelon model, is, normally not feasible and workable for large companies having thousands of retailers. Moreover the extent of uncertainty of the demand/s of the customer/s is also a factor in having a multi-echelon model. But there are many more factors to be considered before deciding on the levels of the inventory model.

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Chapter 6.9, Problem 30P

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Interpretation:Describe the business situation warranting the decision for a multi-level v/s a single level inventory model.

Concept Introduction:A multi-level inventory model is also called a multiechelon model which means having more than one level of warehouses to the retail store. A single level means the supplier/distributor directly sending to the retailer servicing the customer. Such a single echelon model, is, normally not feasible and workable for large companies having thousands of retailers. Moreover the extent of uncertainty of the demand/s of the customer/s is also a factor in having a multi-echelon model. But there are many more factors to be considered before deciding on the levels of the inventory model.

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