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Industrial/Production engineering questions. Multi-Echelon system in series.

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Multi-Echelon system study questions.doc
In the study of J-stage multi-echelon system in series.

We know that a distribution-free approximate upper bound on the cost is
given by the following expression



where

= Backorder penalty cost

= Local holding cost at stage J

= Lead time for stage J

= Demand arrival rate

= Random demand size.



With upper bound cost shown above, can I make the following conclusions?

?

?

Downstream leadtimes have a larger impact on system performance than
upstream leadtimes? Any explanation into this?

Upstream echelon holding cost rates have larger impact on system
performance than downstream echelon holding cost rates? Any explanation
into this?




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