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On the viability of partial inventory pooling

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  • Yigal Gerchak

Abstract

When demands are uncertain, complete inventory pooling is known to be a better strategy than no pooling if the trans-shipment cost is low enough; otherwise, pooling is undesirable. But are there situations where pooling some inventories, but not the rest, in a central warehouse, are the best strategy? We show that such is indeed the case for certain demand distributions and cost parameter values. We show it for a symmetric discrete demand scenario, as well as for a symmetric continuous demand scenario.

Suggested Citation

  • Yigal Gerchak, 2017. "On the viability of partial inventory pooling," International Journal of Inventory Research, Inderscience Enterprises Ltd, vol. 4(1), pages 44-60.
    • Handle: RePEc:ids:ijires:v:4:y:2017:i:1:p:44-60
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    Cited by:

    1. Silbermayr, Lena & Gerchak, Yigal, 2019. "Partial pooling by independent firms with allocation according to contribution to pool," International Journal of Production Economics, Elsevier, vol. 218(C), pages 375-385.

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