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Abstract

A method and system for managing inventory in a multiple level distribution chain by applying optimization algorithms to a range profile constructed from a formulation of the distribution network and the various elements factored in the network. A formal definition of the optimization problem is defined and several algorithms are proposed for the maximization of the range of coverage profiles. The optimization process minimizes transportation costs and avoid bottlenecks. However, if bottlenecks were to occur, the system prioritizes demands and provides an optimal solution for a monotone distribution of products. The basic function presented involves the steps of initializing the range of coverage profile with a starting value; computing the necessary in-flows necessary to fulfill the profile constraints; constructing the cheapest flow for these demands using a minimum-cost algorithm; and lowering or enlarging the range of coverage profiles until a solution is found.

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