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Dynamic shipments of inventories in shared warehouse and transportation networks

Author

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  • Van der Heide, G.
  • Buijs, P.
  • Roodbergen, K.J.
  • Vis, I.F.A.

Abstract

In shared warehouse and transportation networks, dynamic shipments of inventories are carried out based on up-to-date inventory information. This paper studies the effect of network structures on optimal decision-making. We propose a discrete time modeling framework with stochastic demand, capturing a wide variety of network structures. Using Markov decision processes, we obtain optimal order and dynamic shipment decisions for small networks. We compare optimal solutions of different four-node network structures. Results indicate product characteristics significantly influence the effectiveness of network structures. Surprisingly, two-echelon networks are occasionally costlier than any other network. Moreover, dynamic shipments yield considerable gains over static shipments.

Suggested Citation

  • Van der Heide, G. & Buijs, P. & Roodbergen, K.J. & Vis, I.F.A., 2018. "Dynamic shipments of inventories in shared warehouse and transportation networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 240-257.
    • Handle: RePEc:eee:transe:v:118:y:2018:i:c:p:240-257
    DOI: 10.1016/j.tre.2018.07.012
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