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Lateral stock transshipments in a two‐location inventory system with fixed and joint replenishment costs

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  • Yale T. Herer
  • Ayelet Rashit

Abstract

We address the problem of inventory management in a two‐location inventory system, in which the transshipments are carried out as means of emergency or alternative supply after demand has been realized. This model differs from previous ones as regards its replenishment costs structure, in which nonnegligible fixed replenishment costs and a joint replenishment cost are considered. The single period planning horizon is analyzed, with the form and several properties of the optimal replenishment and transshipment policies developed, discussed and illustrated. © 1999 John Wiley & Sons, Inc. Naval Research Logistics 46: 525–547, 1999

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  • Yale T. Herer & Ayelet Rashit, 1999. "Lateral stock transshipments in a two‐location inventory system with fixed and joint replenishment costs," Naval Research Logistics (NRL), John Wiley & Sons, vol. 46(5), pages 525-547, August.
    • Handle: RePEc:wly:navres:v:46:y:1999:i:5:p:525-547
    DOI: 10.1002/(SICI)1520-6750(199908)46:53.0.CO;2-E
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    References listed on IDEAS

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    1. Lawrence W. Robinson, 1990. "Optimal and Approximate Policies in Multiperiod, Multilocation Inventory Models with Transshipments," Operations Research, INFORMS, vol. 38(2), pages 278-295, April.
    2. Hau L. Lee, 1987. "A Multi-Echelon Inventory Model for Repairable Items with Emergency Lateral Transshipments," Management Science, INFORMS, vol. 33(10), pages 1302-1316, October.
    3. Sven Axsäter, 1990. "Modelling Emergency Lateral Transshipments in Inventory Systems," Management Science, INFORMS, vol. 36(11), pages 1329-1338, November.
    4. Barry A. Pasternack & Zvi Drezner, 1991. "Optimal inventory policies for substitutable commodities with stochastic demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 38(2), pages 221-240, April.
    5. Morris A. Cohen & Paul R. Kleindorfer & Hau Leung Lee, 1986. "Optimal stocking policies for low usage items in multi‐echelon inventory systems," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 33(1), pages 17-38, February.
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    Cited by:

    1. Hussein Naseraldin & Yale T. Herer, 2011. "A location‐inventory model with lateral transshipments," Naval Research Logistics (NRL), John Wiley & Sons, vol. 58(5), pages 437-456, August.
    2. Hadar Amrani & Eugene Khmelnitsky, 2017. "Optimal division of inventory between depot and bases," Naval Research Logistics (NRL), John Wiley & Sons, vol. 64(1), pages 3-18, February.
    3. Feng, Pingping & Wu, Feng & Fung, Richard Y.K. & Jia, Tao, 2018. "Evaluation of two transshipment policies in a two-location decentralized inventory system under partial backordering," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 207-224.
    4. Li, Ying & Liao, Yi & Hu, Xinxin & Shen, Wenjing, 2020. "Lateral transshipment with partial request and random switching," Omega, Elsevier, vol. 92(C).
    5. Cem Deniz Caglar Bozkir & O. Erhun Kundakcioglu & Andrea C. Henry, 2022. "Hospital service levels during drug shortages: Stocking and transshipment policies for pharmaceutical inventory," Journal of Global Optimization, Springer, vol. 83(3), pages 565-584, July.
    6. Ozen, U. & Slikker, M. & Norde, H.W., 2007. "A General Framework for Cooperation under Uncertainty," Other publications TiSEM 1972d523-d611-4906-a7c1-a, Tilburg University, School of Economics and Management.
    7. Costantino, Francesco & Di Gravio, Giulio & Patriarca, Riccardo & Petrella, Lea, 2018. "Spare parts management for irregular demand items," Omega, Elsevier, vol. 81(C), pages 57-66.
    8. Bingbing Cao & Tianhui You & Chunyi Liu & Jian Zhao, 2021. "Pricing and Channel Coordination in Online-to-Offline Supply Chain Considering Corporate Environmental Responsibility and Lateral Inventory Transshipment," Mathematics, MDPI, vol. 9(20), pages 1-30, October.
    9. Çömez-Dolgan, Nagihan & Dağ, Hilal & Fescioglu-Unver, Nilgun & Şen, Alper, 2023. "Multi-plant manufacturing assortment planning in the presence of transshipments," European Journal of Operational Research, Elsevier, vol. 310(3), pages 1033-1050.
    10. Bhatnagar, Rohit & Lin, Bing, 2019. "The joint transshipment and production control policies for multi-location production/inventory systems," European Journal of Operational Research, Elsevier, vol. 275(3), pages 957-970.
    11. Cavagnini, Rossana & Bertazzi, Luca & Maggioni, Francesca, 2022. "A rolling horizon approach for a multi-stage stochastic fixed-charge transportation problem with transshipment," European Journal of Operational Research, Elsevier, vol. 301(3), pages 912-922.
    12. De‐bi Cao & Edward A. Silver, 2005. "A dynamic allocation heuristic for centralized safety stock," Naval Research Logistics (NRL), John Wiley & Sons, vol. 52(6), pages 513-526, September.
    13. Naderi, Siamak & Kilic, Kemal & Dasci, Abdullah, 2020. "A deterministic model for the transshipment problem of a fast fashion retailer under capacity constraints," International Journal of Production Economics, Elsevier, vol. 227(C).

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