Abstract:

Based on echelon-inventory theory, a systematic modeling on two-echelon inventory

system of telecom operators in China is proposed The system combines cycle stocks with

safety stocks appropriately in the form of differentiation schemes to determine the optimal

inventory control parameter and optimize the distribution of stocks, and thus analyze the

performance of inventory centralization As a validation, the model is applied to two main

most commonly used items in stock of three branch companies of a prevailing telecom operator,

and its successful application in helping the telecom operators to cut down their inventories

and minimize the total cost throughout the supply chain are demonstrated By comparing the

calculation results of the two items within different branch companies, development proposals

are given in terms of inventory centralization The promotion of these proposals is expected

to have a positive effect on inventory centralization and improve the operation efficiency of

the whole supply chain for the telecom operators

Key words: two-echelon inventory system, inventory control, inventory centralization, telecom operators