Ahmad Makui - Associated professor, Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran,
Ayub Rahimzadeh - Master of science Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran,

Inventories have an important role in all supply chains, and it is important to manage them to minimize the total related costs, consist of holding, ordering and shortage costs. In this paper, we propose a nonlinear model in which a warehouse supplies multiple retailers. Customer demands are random variables with normal distribution. Unsatisfied demands are backordered. Warehouse and retailers work based on periodic review inventory system. Lead times are considered to be deterministic. Calculations show that the warehouse’s demand has normal distribution. Finally, Inventory level that minimizes the total cost is computed.

Supply chain, Inventory, Normal Distribution Demand, Periodic Review