Article2002

EFFECTIVENESS OF STOCK TRANSSHIPMENT UNDER VARIOUS DEMAND DISTRIBUTIONS AND NONNEGLIGIBLE TRANSSHIPMENT TIMES*

75 citations0/0 files storedProduction and Operations Management

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Supply Chain and Inventory Management Advanced Manufacturing and Logistics Optimization Logistics and Transportation Systems

Abstract

This paper investigates the operational characteristics of a pooling group consisting of two stocking locations, supplied periodically by a central warehouse. The two locations may collaborate by moving inventory between them. The lateral transshipment times are shorter than the regular replenishment lead times, but they are not negligible. Several alternative types of ordering and transshipment policies are examined. Extensive experimentation by simulation leads to the conclusion that the benefits of risk pooling are substantial only when demand is highly variable. Moreover, the type and variability of the demand distributions are key determinants of the appropriate transshipment policy and pooling groups design.

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References

1999Inventory management and production planning and scheduling 2018Journal of Business Logistics 2017Journal of Industrial Engineering 1990Optimal and Approximate Policies in Multiperiod, Multilocation Inventory Models with Transshipments 1964Multistage Inventory Models and Techniques 1989Effects of Pooling on the Optimization and Service Levels of Two-Location Inventory Systems 1999Modeling Emergency Supply Flexibility in a Two-Echelon Inventory System 1987Analysis of a Two-Echelon Inventory Control System with Complete Redistribution

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2019Healthcare Supply Chain Simulation with Disruption Considerations: A Case Study from Northern Italy 2005Distribution Centres in Supply Chain Operations 2017A lateral transshipment model for perishable inventory management 2013A Semi-Markov decision problem for proactive and reactive transshipments between multiple warehouses 2007Insights into inventory sharing in service parts logistics systems with time-based service levels

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