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Two-Stage Versus Single-Stage Inventory Models with or without Repair Ability

In this study, we consider an inventory system for a single item, which is being used in the military operations. In the current system, there is a two-echelon inventory setting which consists of a single stock point, the central depot, in the upper echelon and several stock points, the bases, in the lower echelon. A continuous review base-stock policy is used by all facilities. The military headquarters responsible for inventory management identified improvement opportunities such as acquiring repair ability and changing the structure of the supply chain from a two-echelon model to a single echelon model. Considering these opportunities, we investigate four different alternative inventory systems, single-echelon and two echelon models with or without repair ability. Our objective is to determine if and under what conditions each alternative results in lower costs.