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algorithm Appendix arc m-»n BOTTOM-UP SEQUENTIAL HEURISTIC cluster heuristic computational tests constant demand consumed in producing conventional holding cost CORNELL UNIVERSITY cost network DEMANDS AND INTERVALS distribution structure distribution with mean echelon holding cost echelon inventory example feasible flow arc gamma distribution gozinto parameter holding costs incurred inventory at node inventory node inventory of component kVh1 Lemma Lower Bound Theorem Management Science natural reorder interval nested on routes nested relative nested schedule nestedness network be converted node n nonnested network Number of clusters Number of Observations number of orders one-stage problems optimal nested policy optimal policy optimal schedule order intervals order is placed order quantities order simultaneously original system placed at node policy is nested problem with setup Property schedule orders SENSITIVITY OF MEAN sequential lot sizing sequential top-down heuristic serial cluster network setup arcs setup node standard deviations Table Manufacturer top-down sequential heuristic Veinott volume parameter worst-case effectiveness